Central banks around the world have announced they will keep their benchmark interest rates unchanged, amid heightened global economic risks stemming from the conflict in the Middle East.
The Bank of England (BoE) said in a statement on Thursday that it had kept its benchmark interest rate unchanged at 3.75 percent.
At its meeting on Wednesday, the BoE's Monetary Policy Committee (MPC) voted unanimously to maintain the bank rate at 3.75 percent. Members of the committee noted that the price hikes of energy and other commodity caused by the conflict in the Middle East will affect households' fuel and utility prices and will have indirect effects on business costs in the UK.
Prior to this, there had been continued disinflation in domestic prices and wages, the MPC said, adding "CPI inflation will be higher in the near term as a result of the new shock to the economy."
The MPC said it is alert to the increased risk of domestic inflationary pressures through second-round effects in wage and price-setting, noting that "the risk will be greater the longer higher energy prices persist."
It said it is also assessing the implications for inflation of the weakening in economic activity that is likely to result from higher energy costs.
The committee said it will continue to monitor the situation in the Middle East closely, assess its impact on global energy supply and prices, and act as necessary to ensure that CPI inflation remains on track to meet the 2 percent target in the medium term.
Britain's annual inflation rate fell to 3.0 percent in January amid easing price pressures, earlier data from the Office for National Statistics showed.
The Swiss National Bank (SNB) maintained its main policy rate at 0 percent on Thursday, a third-straight hold since June 2025.
The SNB said the "willingness to intervene in the foreign exchange market has increased" to prevent excessive Swiss franc appreciation in the current environment.
Sweden's Riksbank left its key rate unchanged at 1.75 percent on Thursday and signaled it could remain at the same level for some time, citing low inflation and energy price hikes.
The European Central Bank also kept its benchmark interest rate on hold at 2 percent for the sixth consecutive meeting.
The Bank of Japan (BOJ) decided to leave its benchmark interest rate unchanged at around 0.75 percent after concluding its two-day monetary policy meeting on Thursday.
The central bank maintained the key rate for the second consecutive meeting as widely expected, after raising it to the highest level in 30 years in December 2025.
The BOJ, however, did not close the door to further interest rate hikes.
The statement said that if economic activity and prices move in line with the bank's outlook, it will continue to raise the policy interest rate and adjust the degree of monetary accommodation to achieve its 2 percent inflation target in a stable manner.
The Bank of Canada on Wednesday announced that it will maintain its target for the policy rate at 2.25 percent.
The central bank said in a press release that the conflict in the Middle East has increased volatility in global energy prices and financial markets. While global economic growth had been on track before the conflict, the sharp rise in oil and natural gas prices, combined with transportation bottlenecks in the Strait of Hormuz, is expected to boost global inflation in the near term, it said.
The Bank of Canada said it will continue to closely monitor the unfolding conflict in the Middle East and the impact of U.S. tariffs and trade policy uncertainty on the Canadian economy.
The central bank said if energy prices stay high, it will act decisively to prevent their effects from broadening and leading to persistent inflation.
Central banks around the world keep interest rates unchanged
