Bank of England Live: Interest rates held as hawks warn of ‘highly uncertain’ energy prices

Welcome back to the City AM liveblog.

The Bank of England’s Monetary Policy Committee has today decided to hold interest rates at 3.75 per cent in a hawkish display.

In last month’s decision, the Bank held rates in a unanimous decision. Afterwards, short-term gilt yields, which reflect government borrowing costs, sharply rose as traders priced in up to three interest rate hikes in the next couple of years. 

Though governor Andrew Bailey was quick to warn some investors were “getting ahead of themselves”.

City analysts have warned that the multitude of impacts from the war in the Middle East, which has dragged on due to failed US-Iran peace talks, could pose an array of dilemmas for MPC members.

Inflation surged to 3.3 per cent in the latest release from the Office for National Statistics – that was a jump from three per cent in February. But since then oil prices have raced even higher, hitting above $120 a barrel this morning – the highest since the war in Iran broke out at the end of February.

All rate-setters will provide justifications for their own votes in the minutes to the decision. The Bank will also publish a revised set of forecasts – the first monetary policy report since the war began – as well as guidance on scenarios that could denote the Bank’s thinking on the risk of inflation spiralling in the coming months. 

We’ll be bringing you the latest in the lead up to the decision at 12pm and more from the City market.

Here’s a few of our top headlines today:

• Twilight zone: Markets await ‘highly uncertain’ interest rates decision
• Unilever beats analyst expectations but food spin-off costs up to €500m
• Whitbread to cut nearly 4,000 jobs in £2bn cost saving plan
• Standard Chartered registers $190m charge on Iran war
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