The Bank of England has held interest rates at 3.75% amid growing concerns that conflict in the Middle East will drive up inflation in the UK. The decision follows rising energy prices linked to disruption in the Strait of Hormuz, a critical shipping route for global oil and gas supplies. Iranian attacks have significantly reduced shipping through the region, contributing to increased costs for fuel, utilities, and goods. The Bank warned that inflation could rise to around 3.5% in the coming months, reversing earlier expectations of a continued decline. While the rate hold was widely anticipated, it means borrowing costs for households remain high, with mortgage rates already increasing. Officials emphasised that resolving the crisis depends on restoring safe passage through key energy routes. The situation highlights the UK’s vulnerability to global shocks and the wider economic impact of international conflict; policymakers have to 'wait and see' as events continue to unfold.