The Bank of England has issued a stark warning that UK inflation is poised to rise again, driven by surging energy costs linked to the escalating conflict between the United States and Iran.
The central bank’s latest forecast projects consumer prices could peak at 3.2% later this year, a significant reversal from the disinflationary trend that had characterized the past two years.
75%, marking the sixth consecutive meeting without a change.
This outlook comes immediately after the Monetary Policy Committee voted to hold its benchmark interest rate steady at 3.75%, marking the sixth consecutive meeting without a change.
The decision effectively halts the monetary easing cycle that began in December, as policymakers prioritize guarding against a second wave of price pressures over stimulating growth.
The shift in tone suggests that the era of predictable rate cuts is on hold, at least until the geopolitical situation stabilizes.
The primary driver of the revised forecast is the transmission of higher global energy prices into the UK economy.