Bank of England holds interest rates at 3.75% as inflation fears mount

Split vote comes as Iran war is rekindled and oil price climbs back above $90 a barrel

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• Only Middle East crisis is preventing drop in UK interest rates

The Bank of England has kept UK interest rates on hold as it warned that a further escalation in the Iran war could drive inflation above 4% next year, adding to cost of living pressures on households.

Against a volatile backdrop in the Middle East conflict, the Bank’s monetary policy committee (MPC) voted by six to three to keep its key base rate at 3.75%.