BOE Set to Hold Rates With Oil Posing New Threat

The Bank of England is expected to keep interest rates at 4.25% on Thursday and signal it is sticking with its one-cut-every-other-meeting approach as officials try to strike a balance between elevated inflation, higher oil prices and a slowing economy.

The Monetary Policy Committee lowered rates by a quarter-point in May, in a surprisingly close vote that reflected concerns inflation may not return to the 2% target as quickly as hoped. Since then, inflation has surged to its fastest pace in more than a year and escalating tensions in the Middle East are now complicating matters by driving up oil prices.