War could force Bank to hike interest rates

THE Bank of England could be forced to hike interest rates in the face of a Middle East crisis triggered energy price shock, experts warn.

- BY GRAHAM HISCOTT Business & Consumer Editor and ALEXANDER BROWN Assistant Political Editor

The US-Israel war with Iran has sent global oil and gas prices spiralling.

It is feared this could feed through to higher inflation on the back of rising prices for everything from petrol to food.

Before last week's dramatic escalation of events, the Bank of England had been expected to cut its base rate from 3.75% when it next met in mid-March.

But experts say the chances of that have evaporated, with no certainty of when - or if - they will fall, with consequences for mortgage borrowers and businesses.

Helen Miller, director at the Institute for Fiscal Studies, said yesterday: "Higher inflation would likely mean higher interest rates. We should all hope that we are not facing a protracted conflict."