Bank of England warns ‘higher inflation is unavoidable’ after leaving interest rates on hold

Bank governor says latest MPC decision is reasonable given unpredictability of events unfolding in Middle East

• Business live – latest updates

The Bank of England has left interest rates unchanged at 3.75% but warned that the UK should brace for hikes later this year, as “higher inflation is unavoidable” as a result of the war in the Middle East.

The Bank’s rate-setting monetary policy committee (MPC) voted to leave borrowing costs on hold on Thursday, with its nine-member committee split 8-1 in their decision.