Interest rates expected to be held as uncertainty over Iran war continues

the bank of england is expected to hold interest rates at 3.75% on thursday, with uncertainty from the iran conflict dominating the outlook. inflation sits at 3.3%, still above the 2% target, but the monetary policy committee is expected to take a cautious approach. the decision comes at 12:00 bst, alongside the bank's first full monetary policy report since the us-israel strikes on iran began in late february. investec economist sandra horsfield said the conflict's repercussions are "still keenly felt" and uncertainty about how the situation could evolve "remains high." the war has pushed up mortgage costs. the average two-year fixed rate rose from 4.83% at the start of the conflict to a peak of 5.90%, now slightly lower at 5.81%. some lenders have announced cuts in the last 24 hours, but brokers say fixed rate rises in the coming weeks can't be ruled out.