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

The Bank of England has kept interest rates unchanged for the fifth meeting in a row but has indicated it could raise them if the Iran war escalates. It expects inflation - the rate at which prices rise - to pick up due to volatile oil and gas prices caused by the Middle East conflict, although the peak will be slightly lower than previously thought. While major uncertainties remain because of the war, the Bank predicts the UK economy will grow this year by more than previously forecast. The Bank voted to hold interest rates at 3.75% at its latest meeting. It said any change in borrowing costs would depend on how long the energy shock will last and how severe it is. Three members of the Bank's nine-member rate-setting committee voted for a hike, one more than the previous meeting. Speaking at a news conference, Bank of England governor Andrew Bailey said: "If the conflict in the Middle East persists for an extended period... it's likely that we will have to tighten policy to counter inflationary pressures in the UK economy." However, Bailey said the Bank was not currently moving towards raising interest rates. "Please do not leave this room thinking that the Bank of England is edging towards a hike, because frankly, there's nothing in what I said, and I think any of us have said along those lines," he told reporters.