RISING OIL PRICES COULD FORCE UP UK INTEREST RATES, SAY ECONOMISTS

The Bank of England is expected to keep interest rates on hold on Thursday, but economists warn that rising oil prices due to renewed conflict in the Middle East could force a rate hike later this year. According to The Guardian, the Bank's economic forecasts may need to be revised if oil prices exceed $100 a barrel. This potential rate hike is attributed to the impact of conflict on energy costs.

Economists suggest that while an interest rate increase is unlikely this week, it may be considered in the future due to the escalating conflict in the Middle East. The Associated Press reports that oil prices have eased after the US and Iran paused their attacks, but this temporary easing may not alleviate long-term pressure on energy costs. The Guardian notes that City economists are closely watching the situation, anticipating potential changes to the Bank's economic forecasts.

The situation is significant because rising oil prices could have far-reaching effects on the UK economy, potentially influencing the Bank of England's monetary policy decisions. The conflict in the Middle East and its impact on energy costs add complexity to the economic landscape, making it challenging for the Bank to predict future interest rate changes.

• The Bank of England is expected to keep interest rates on hold on Thursday
• Rising oil prices due to Middle East conflict may force a rate hike later this year
• Oil prices easing after US and Iran paused their attacks, but long-term pressure remains

Read the original source for full detail available at The Guardian src