"The war in the Middle East is causing inflation to rise again this year. The decision to hold rates at 3.75% for now is a reasonable place given the situation of the economy and the unpredictability of events in the Middle East."
"The conflict in the Middle East meant that the outlook for inflation was now a very different picture from three months ago when it was expected to fall to 2% by the middle of the year."
"The sharp rise in energy prices is already being felt in the UK in the form of higher fuel costs and is likely to push inflation higher as the effect of these higher energy prices pass through the economy."
The Bank of England has maintained interest rates at 3.75% while anticipating future increases due to unavoidable inflation linked to the Middle East conflict. The monetary policy committee voted 8-1 to hold rates steady, with Governor Andrew Bailey noting the rising inflation caused by the war. The outlook for inflation has changed significantly, with current rates at 3.3%, up from 3%. Higher energy prices are impacting fuel costs, although second-round effects on wages are expected to be limited due to subdued labor demand and rising unemployment.
Read at www.theguardian.com
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