30.04.202611:03:03UTC+00BoE Holds Rates Amid Iran Risks

In April 2026, the Bank of England’s Monetary Policy Committee voted 8–1 to hold Bank Rate at 3.75%, with one member favouring an increase to 4%. The Committee noted that the conflict in the Middle East has introduced substantial uncertainty into global energy markets. While monetary policy cannot directly influence energy prices, the Bank’s objective is to ensure that any inflationary impact is consistent with returning inflation to the 2% target over the medium term. The outcome will depend on the scale and duration of the shock and how it transmits through the wider economy.

CPI inflation has risen to 3.3% and is expected to climb further later in the year as higher energy costs feed through, increasing the risk of second-round effects in wages and prices. However, a loosening labour market and weaker economic growth are likely to help restrain inflationary pressures. In addition, the tightening of financial conditions since the onset of the conflict is expected to weigh on demand.