The Bank of England (BoE) on Thursday kept its benchmark interest rate unchanged at 3.75 percent, as surging global energy prices pushed up inflation and raised the prospect of further price pressures in Britain.
According to the bank, global energy prices had risen significantly since the July Monetary Policy Report and remained volatile. Spot prices of Brent crude and British wholesale gas had risen by 36 percent and 78 percent, respectively, since the period leading up to the July Report, it said.
Data released by the Office for National Statistics on Wednesday showed that Britain's consumer price index (CPI) rose 3.1 percent year on year in August, up from 2.9 percent in July. On a monthly basis, motor fuels made the largest upward contribution.
The bank expected CPI inflation to rise further to around 3.75 percent in the last quarter of 2026 and to reach slightly above 4 percent in the first quarter of 2027, based on energy prices at the close of business on Monday.
The bank said the monetary policy was being set to ensure inflation comes down to 2 percent sustainably as the economy adjusts to the energy shock. The policy stance required to achieve this will depend on the scale and duration of the shock and how it feeds through the economy.
So far, higher global energy costs have had "a limited effect" on price and wage-setting in Britain, said Andrew Bailey, governor of the BoE. But he also noted that "the longer this volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise bank rate to ensure that inflation falls back to our 2 percent target."
The decision to hold the interest rate came as the BoE's Monetary Policy Committee voted 6-3, with three members voting to increase the rate by 0.25 percentage points to 4 percent.
"Monetary conditions in this country have tightened quite a bit this year because we were expected to cut rates and we haven't," Bailey said.
The bank also noted that, given the time it takes for inflationary pressures to spread, it should not wait too long for evidence that inflation was becoming more entrenched in the economy before raising interest rates.
Bank of England holds interest rate at 3.75 pct despite energy price hikes
Arieh Warshel, a Nobel Laureate in Chemistry in 2013, has called for greater usage of artificial intelligence (AI) to drive breakthroughs in innovative drug development, while emphasizing the need to maintain strict safety standards.
Warshel on Friday attended a session on "International Drug Safety Governance and China's Drug Regulatory Reform" of the ninth Hongqiao International Economic Forum, held as part of the ninth China International Import Expo (CIIE) in Shanghai.
Speaking to China Media Group (CMG), Warshel praised China for its abundant clinical resources, complete industrial chain, and large pool of young research talent.
"I am extremely impressed from the rapid growth and the investment in this pharmaceutical direction. I am involved essentially with the two companies that try to do it. The people who are working on it, especially in the AI directions, are extremely knowledgeable. So there must be a future outcome from this," he said.
China's innovative drugs have gained rapid growth over the years. In 2025, more than 2,900 clinical trials for new drugs were registered nationwide, a rise of 18 percent year on year and a record high in scale. The number of clinical trials of cell and gene therapies grew by about 30 percent last year, highlighting strong activity in cutting-edge areas of drug development.
Warshel highlighted the potential of AI to accelerate research and development, while stressing holding the bottom line of safety.
"In this case, AI could be very useful, might accelerate the R and D, but first you have to show that this works. If you could do the drug test on a computer rather than on a mouse, and you prove that it works equally well. This is clearly a direction which is very promising," he said.
He also noted that computational science and AI have the potential to shorten the new-drug development cycle, while cautioning against the pursuit of quick results.
"Essentially one of the difficulties in big pharma is that they don't let you study the same problem for too long. If you do not find a solution, you move to another thing. In all the great discoveries like the Nobel Prize and so on, that I know well because people spend more than three years on the same problem they start, so you need support for it to stay on the same problem," said Warshel.
Nobel laureate calls for expanded AI use in drug development at CIIE
