See more This is Money on Google - save us as a Preferred SourceBy ANGHARAD CARRICK, BUSINESS NEWS EDITOR Updated: 12:18 BST, 18 June 2026
The Bank of England held interest rates at 3.75 per cent today, even as other central banks begin raising rates following the inflation shock caused by the Iran war.The Monetary Policy Committee voted by a majority of 7-2 in favour of keeping interest rates at their current level, holding firm in the face of other central banks' decision to hike rates to combat higher inflation. Two MPC members voted to increase Bank Rate by 0.25 percentage points, to 4 per cent. Last week, the European Central Bank became the first in the G7 to raise interest rates, after voting to hike by 0.25 percentage points to 2.25 per cent. The Bank of Japan also voted to increase its main interest rate to 1 per cent, from 0.75 per cent - a level not seen since 1995.The Federal Reserve also held rates at its meeting on Wednesday, but indicated it would be prepared to hike later this year. The Middle East conflict pushed oil prices to as high as $126 a barrel, stoking fears that inflation could reach 5 per cent by summer. Central banks typically raise rates to bring down inflation and cut them once prices are back under control.However, the Iran peace deal agreed this week has sent oil prices to below $80 a barrel and slashed the chances of possible rate hikes later this year. Hold: The Bank of England has kept the base rate at 3.75 per cent
