Bank of England expected to hold interest rates at noon as it assesses fallout from Iran war – business live

Brent crude jumps another 7% to highest since March 2022 on report US is considering military options against Iran

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The Bank of England is expected to keep interest rates on hold at noon, as policymakers assess the economic fallout from the Iran war.

Economists will be looking for any clues on future rate policy in the statement and the subsequent press conference. The nine-member rate-setting panel, led by central bank governor Andrew Bailey, could hint at rate hikes in the months ahead if the conflict in the Middle East — where a shaky ceasefire is in place — drives inflation higher.

For now, the monetary policy committee is expected to keep the bank’s main rate at 3.75%, while one or two members could vote for a quarter-point hike as a premptive move to ward off higher inflation.

Before the US and Israel began their attacks on Iran on 28 February, the central bank had been expected to cut borrowing costs this year, as inflation was predicted to fall back toward its 2% target during the spring. The war has since upended the bank’s predictions.

Sandra Horsfield, an economist at Investec, said the “repercussions of the conflict are still keenly felt and uncertainty about how the situation could evolve also remains high”. Continue reading...