Bank of England Holds Rate at 3.75% Amid Mideast Conflict

The Bank of England held its benchmark interest rate steady at 3.75 percent on Thursday, April 30, as its Monetary Policy Committee voted 8-1 to maintain the status quo amid heightened uncertainty from the Middle East conflict driving up global energy prices.

Eight members of the nine-person committee supported the decision, with Chief Economist Huw Pill dissenting in favor of a quarter-point increase to 4 percent. The move marks the third consecutive hold at this level after a series of reductions from 5.25 percent since mid-2024. Officials cited the unpredictable impact of the conflict, including disruptions to oil and gas supplies via the Strait of Hormuz, as a key factor. Consumer Prices Index inflation rose to 3.3 percent in March, fueled by higher fuel costs, and is expected to climb further as energy price increases filter through the economy.

In its April Monetary Policy Report, the Bank outlined three scenarios reflecting varying degrees of energy shock persistence and second-round effects on prices and wages. In the most benign case, with a quick resolution and easing prices, inflation would peak at around 3.6 percent by year-end. A middle scenario anticipates a peak...