The Bank also expects the economy to grow more than previously forecast this year, although uncertainties remain because of the Iran war.

The UK economy is expected to grow by more than previously forecast this year, according to the Bank of England, although major uncertainties remain because of the Iran war. The Bank said it expects the pace of price rises – as measured by inflation – to pick up due to volatile oil and gas prices caused by conflict in the Middle East. But the peak will be slightly lower than previously thought and the UK economy will expand a little more. The Bank voted to hold interest rates at 3.75% for a fifth meeting in a row. It said any change in borrowing costs would depend on how long the energy shock will last and how severe it is. The Bank moved marginally towards a rise in rates later in the year with three members of its nine-member rate setting committee voting for a hike, one more than the previous meeting. If the Iran war continues and oil prices hover around $100 a barrel, then a rate rise seems likely. However, many in the markets expect tensions to subside in the coming weeks, ahead of crucial elections across the US in the Autumn. Oil and gas prices have seen wild swings in recent days because of uncertainty over the status of the conflict. On Monday, the price of crude fell as US President Donald Trump said there were "very friendly negotiations" happening between Washington and Tehran.