The Bank of England has decided to maintain interest rates at 3.75%, primarily due to concerns about inflationary pressures stemming from the ongoing conflict in the Middle East. Officials believe that while domestic inflation remains stable, the war could lead to sustained high oil prices, impacting the overall economic outlook.
Despite low wage increases and stable prices in the UK, there are fears that companies might raise prices in response to perceived production cost increases due to the conflict. The Bank's monetary policy committee is closely monitoring these developments.