economy

April 30, 2026

Bank of England keeps rates on hold at 3.75% as Iran war shakes outlook

The Bank of England voted to keep its key interest rate on hold at 3.75% on Thursday

Bank of England keeps rates on hold at 3.75% as Iran war shakes outlook

TL;DR

  • Bank of England holds interest rate at 3.75%.
  • Iran war creates uncertainty about energy prices and inflation.
  • Monetary policy has limited ability to control energy prices.
  • Inflation rose to 3.3% in March, driven by fuel prices.
  • Bank of England is wary of second-round inflation effects like wage demands.
  • Three scenarios for the UK economy were presented, with potential inflation peaks ranging from 3.5% to 6.2%.
  • In the most severe scenario, rates might rise to 5.25% by 2027, risking recession.

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