BoE delivers message Britons don’t want to hear as inflation – and rates – look set to rise

Decision to hold interest rates is backed by gloomy assessment of economy as Iran war pushes up oil prices

• Bank of England holds interest rates at 3.75%

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The US-Israel attack on Iran has already driven prices higher and not just at the petrol pumps, the Bank of England said on Thursday in a gloomy assessment of the UK’s economic outlook.

An inflation rate that was on track to fall from 3% to the Bank’s 2% target in the coming months is now expected to rise to 3.5%. That is one probable impact of the US and Israel’s war on Iran.