The Bank of England kept its key interest rate on hold at 3.75% for the fifth time this year on Thursday after a bigger-than-expected drop in the inflation rate last month gave policymakers breathing space to assess the fallout from renewed fighting in Iran.
Interest rates are currently at their lowest level since January 2023, with analysts having expected the BoE to keep rates steady despite a fall in inflation in June.
Although inflation has been easing, renewed hostilities between Iran and the US in the Middle East have fuelled concerns that energy prices could rise again.
Monetary policy committee split on interest rates
The Bank’s Monetary Policy Committee voted 6-3 to keep the rate at 3.75%, in line with the expectations of most economists. Policymakers have kept the rate at that level since December after four rate cuts in 2025.
