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

The Bank of England held interest rates at 3.75% amid concerns that inflation could rise due to the Iran war. Photograph: Andy Rain/EPA

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.