THE Bank of England is expected to hold interest rates at 3.75 per cent again on Thursday amid fresh attacks in the Middle East.

Economists have predicted the bank’s rate-setting committee will vote seven to two in favour of maintaining the current rate after US threats reignited inflation concerns.

The Office for National Statistics said last week that British consumer price index inflation eased back to a 15-month low in June, at 2.6 per cent.

But oil prices surged above $100 (£75) per barrel on Thursday for the first time since May following the end of the ceasefire between US-Israeli and Iranian forces.

Inflation is now widely expected to swing back higher and further away from the bank’s 2 per cent inflation target.

The bank has previously predicted that it will rise back to 3.25 per cent later this year as higher energy costs feed into household bills from this month.