Bank of England to Decide as Oil Spike Revives Inflation Fears
The Bank of England announces its interest-rate decision at noon on Thursday, with economists expecting it to hold Bank Rate at 3.75 per cent even as the oil-price surge from the Iran war revives fears of stubborn inflation. Gilt yields climbed to around 5.06 per cent, their highest in months, and markets braced for a more hawkish tone. The US Federal Reserve held its own rates steady overnight.
The decision, accompanied by a fresh Monetary Policy Report, comes at an awkward moment: the jump in oil towards $90 a barrel threatens to keep inflation elevated just as the Bank had hoped to steer towards cuts. Persistent services inflation had already made policymakers cautious, and the energy shock narrows their room further. For borrowers, the message is that cheaper money remains distant, with lenders already raising mortgage rates. The vote split and the Bank’s guidance will matter as much as the decision itself. Watch the language on the oil shock at noon.