The Bank of England (BoE) kept its benchmark interest rate steady at 3.75% Thursday, meeting analysts' expectations as it opted against a hike despite risks to inflation after the U.S.-Iran war pushed up energy prices.
The widely expected BoE decision came after the Federal Reserve (Fed) on Wednesday signalled a U.S. rate increase this year, even as it kept borrowing costs steady.
The Bank of Japan (BOJ) on Tuesday raised interest rates to a 31-year high as it battles inflation caused by the Middle East war, while the European Central Bank (ECB) last week raised its benchmark rate for the first time since 2023.
"Oil prices have fallen in recent days, and that's encouraging," Bank of England Governor Andrew Bailey said after the decision.
"But they're still higher than before the war," he noted. "Whatever happens in the future, the higher energy prices of the past four months mean there's already some inflationary pressure in the pipeline."
