![\"Bank](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/9628269be608585affd33676481688fe.jpeg\")
Bank of England governor Andrew Bailey said \u2018this is a major shock to energy prices\u2019 (Justin Tallis\/PA) \u00b7 Justin Tallis <\/p>\nReopening the Strait of Hormuz is \u201cthe best thing to do\u201d to prevent interest rates rising, Bank of England governor Andrew Bailey has said.<\/p>\n
In an interview on Thursday evening after the Bank\u2019s Monetary Policy Committee (MPC) voted unanimously to leave the rate unchanged at 3.75%, Mr Bailey said any further cuts are \u201cnot on the horizon\u201d as he hinted at possible hikes.<\/p>\n
It is the first time that all members have voted the same way since September 2021.<\/p>\n
Iran effectively closed the vital oil and gas shipping route after the US and Israel attacked the country, which has pushed up global prices.<\/p>\n
Mr Bailey said the war in the Middle East is hitting petrol pumps now, will likely increase household energy costs in summer, and put pressure on food prices.<\/p>\n
He told LBC\u2019s Andrew Marr: \u201cThe duration of this problem is crucial.<\/p>\n
\u201cI would also say very clearly that the best way to solve this situation is not through monetary policy. It is through sorting out at the source of what\u2019s going on.<\/p>\n
\u201cFrankly, reopening the Strait of Hormuz is the best thing to do. Get the energy market back on its normal footing, as it were.\u201d<\/p>\n
Asked if he has a message for US President Donald Trump, Israeli Prime Minister Benjamin Netanyahu, and \u201cwhoever\u2019s in charge in Tehran\u201d, Mr Bailey said: \u201cThe best thing we can do actually for the world economy\u2026 is to sort out the problem in terms of reopening the energy supply lines, because that is in the best interest of people in the world.\u201d<\/p>\n
UK military planners have joined the US Central Command to help formulate proposals for opening the Strait.<\/p>\n
The MPC now expects Consumer Prices Index inflation to be around 3% in the second quarter of 2026, up from the 2.1% that had been forecast in February, with a potential rise in inflation up to 3.5% in the third quarter.<\/p>\n
Mr Bailey was asked if he foresees, in the final two years of his term, the ambition to reduce inflation to at or below 2% being fulfilled.<\/p>\n
He told the programme: \u201cIf you\u2019d asked me this question three weeks ago, I was very optimistic on this.\u201d<\/p>\n
The governor added: \u201cWe are fully committed to the inflation target, and our job, frankly, is to deal with the shocks as they come along.<\/p>\n
\u201cI have to do that. I don\u2019t wish them. I wish they were not happening, but they are and we will have to deal with them.\u201d<\/p>\n
He said the impact of the war will likely feed through into a higher Ofgem energy price cap from July.<\/p>\n
It was put to Mr Bailey that the Middle East crisis comes at a time when the UK economy has already \u201cnot been growing strongly\u201d.<\/p>\n
Bank of England governor Andrew Bailey said \u2018this is a major shock to energy prices\u2019 (Justin Tallis\/PA) \u00b7 Justin Tallis <\/p>\n
He responded: \u201cIt is a very difficult time to have this happen, but frankly, any time would be pretty difficult to have this happen.<\/p>\n
\u201cThis is a major shock to energy prices, and we have to deal with it.\u201d<\/p>\n
He said the \u201csustainable rate of growth\u201d in the UK needs to be raised which could come from investment from pensions and artificial intelligence.<\/p>\n
\u201cI\u2019m not starry-eyed about it, but it is probably the most likely area that we\u2019re going to raise the growth rate of the economy and that\u2019s important\u201d, he said of AI.<\/p>\n
The MPC signalled that if the conflict persists and has a bigger impact on UK prices, it would need to take a \u201cmore restrictive policy stance\u201d, which indicates higher interest rates to control inflation.<\/p>\n
The governor added: \u201cThe longer it goes on\u2026 I\u2019m afraid to say, but it is rather an obvious point, the effect will be larger.\u201d<\/p>\n
He said that is why it is \u201cimperative\u201d that \u201ceverything is done that can be done to alleviate this effect\u201d, adding: \u201cThat is the critical thing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Reopening the Strait of Hormuz is \u201cthe best thing to do\u201d to prevent interest rates rising, Bank of…\n","protected":false},"author":2,"featured_media":347914,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[51420,169726,14708,4414,42,4486,98509,121062,51423,43,114994,40,38,41,39],"class_list":["post-347913","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-andrew-bailey","tag-andrew-marr","tag-bank-of-england","tag-energy-prices","tag-headlines","tag-interest-rates","tag-monetary-policy-committee","tag-mpc","tag-mr-bailey","tag-news","tag-strait-of-hormuz","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/347913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=347913"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/347913\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/347914"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=347913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=347913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=347913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}