Bank of England holds rate at 3.75% tolerating above-2% inflation
The Bank of England is sticking with its current interest rate, 3.75%, for now, thanks to slow economic growth and uncertainty from the war in the Middle East.
Governor Andrew Bailey explained that letting inflation stay a bit above the usual 2% target is OK for the moment to help the economy, but he's keeping an eye out in case prices keep rising.
Bank base rate could reach 4%
Originally, there was talk of lowering rates to 3.25%, but now there's a chance they could go up to 4% by December because the conflict is shaking up financial markets and energy prices.
Mortgage rates have jumped about 1% point, making it tougher for people to buy homes or borrow money.
Bailey also pointed out that these changes are cooling off the housing market and raising government debt costs.