BOE Set to Stress Test Longer Energy Shock While Holding Rates

The Bank of England is expected to stress test multiple scenarios that reveal how it might react to a prolonged energy price shock this week, as it holds off immediate action on interest rates.

The Monetary Policy Committee is widely predicted to leave borrowing costs on hold at 3.75% on Thursday as it awaits further clarity on the Middle Eastern conflict. However, its members may use an innovation in their communications to show how they will respond to extended market turmoil as the Iran war comes close to entering its third month.