Bank of England Opens Door to Possible Rate Hike

**March 19 (FXStreet) — The Bank of England (BoE) voted unanimously to hold interest rates steady on Thursday, marking the first time in four and a half years the central bank has made a decision without any dissenting members.** The meeting’s tone shifted notably amid the Middle East conflict, which disrupted oil production in the world’s top oil-producing region and snarled tanker shipments through the critical Strait of Hormuz. BoE rate-setters opened the door to a potential rate hike, with Governor Andrew Bailey warning policy must “address the risks of potentially more persistent impacts on UK CPI.” Bailey added: “Whatever the outcome, our responsibility is to ensure inflation returns to the 2% target.” The BoE removed language from its February statement that the “base rate could be further reduced.” Tenreyro, the BoE’s most dovish policy member, noted a prolonged energy supply crisis may require rate hikes. Several rate-setters said they would have supported borrowing cost cuts if the conflict did not escalate.