Governor Andrew Bailey says "interest rates remain on a gradual downward path" but cautions "the world is highly unpredictable".

As widely expected, the Bank of England kept interest rates on hold as fears grow that the conflict between Israel and Iran will escalate to involve the United States. This would likely send oil prices soaring and push UK inflation further above target.

The Bank of England has left its interest rates on hold at 4.25% during its Thursday meeting, though the bank has indicated that cuts were coming later in this year.