The Bank of England voted on Thursday to keep its key interest rate on hold at 3.75%. This decision aligns the institution with the Federal Reserve and the Bank of Japan as they maintain their current positions amid global economic uncertainty.
The decision comes as policymakers assess the economic fallout from the war in the Middle East and Iran's effective closure of the Strait of Hormuz. This strategic waterway is critical for global energy supplies, as a fifth of the world’s crude oil typically passes through it.
Rising oil prices, driven by the conflict, have soared toward the central bank’s most pessimistic scenario for the economy. These developments have disrupted previous expectations for a spring rate-cut playbook.
While rates remain unchanged for now, several policymakers indicated that they may consider future hikes depending on how the economic situation evolves.