Bank of England warns ‘higher inflation is unavoidable’ after leaving interest rates on hold

Bank governor says latest MPC decision is reasonable given unpredictability of events unfolding in Middle East

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The Bank of England has left interest rates unchanged at 3.75% but warned that the UK may need to brace for hikes later this year, as “higher inflation is unavoidable” as a result of the war in the Middle East.

The Bank’s rate-setting monetary policy committee (MPC) voted to leave borrowing costs on hold on Thursday, with its nine-member committee split 8-1 in their decision.

Andrew Bailey, the governor of the Bank of England, said: “The war in the Middle East is causing inflation to rise again this year.”