00:01The Bank of England held its benchmark interest rate at 3.75% on Thursday,
00:07but warned of higher inflation to come owing to the U.S.-Iran war pushing up energy prices.
00:13The Bank's Monetary Policy Committee voted 6-3 to hold the rate steady,
00:17in line with the expectations of most economists. Policymakers have kept the
00:22rate at that level since December after four rate cuts in 2025.
00:27The split decision highlights growing tensions among central banks around the world
00:31about how to respond to stubbornly high inflation and concerns that the war in Iran will lead to
00:36another round of price increases. Britain's annual inflation rate dropped to 2.6% in June as fuel
00:43prices eased in the wake of a short-lived ceasefire between the United States and Iran. However,
00:49the dip is expected to be temporary as fresh fighting in the Middle East this month pushed
00:53oil prices higher. In its most pessimistic scenario, where tensions in the Middle East
00:59escalate, the BOE forecasts that U.K. inflation could jump as high as 4.5% in 2027.
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