All members of the Monetary Policy Committee voted in favour of holding the rate.

Prior to the ongoing conflict in the Middle East, the BoE was expected to cut base rate by at least 0.25% today but the institution is set to remain cautious throughout 2026.

During today’s meeting the MPC said: “Conflict in the Middle East has caused a significant increase in global energy and other commodity prices, which will affect households’ fuel and utility prices and have indirect effects via businesses’ costs.”

“Prior to this, there had been continued disinflation in domestic prices and wages. CPI inflation will be higher in the near term as a result of the new shock to the economy.”

“Monetary policy cannot influence global energy prices but aims to ensure that the economic adjustment to them occurs in a way that achieves the 2% target sustainably. “

“The MPC is alert to the increased risk of domestic inflationary pressures through second-round effects in wage and price-setting, the risk of which will be greater the longer higher energy prices persist. The MPC is also assessing the implications for inflation of the weakening in economic activity that is likely to result from higher energy costs.”

“The Committee will continue to monitor closely the situation in the Middle East and its impact on global energy supply and energy prices. It stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term.”

The bank last lowered the base rate in December from 4% to 3.75% and was then held on 5 February.

Inflation had fallen to 3.0% in January, according to the ONS. Inflation has fallen a long way from its peak of over 10% three years ago, and at the last meeting the BoE said it expected it to be back to its 2% target this spring.

The ONS’ next data release for inflation is due on 25 March.