The Bank of England announced a 25-basis-point rate hike, raising its benchmark interest rate to 4%. This is the Bank’s first rate hike in more than three years, since August 2023. The monetary policy decision was approved by an 8–1 vote. Governor Bailey cautioned that the hike does not signal the start of a series of consecutive increases, but said the Bank would retain the option of tightening policy further if geopolitical conflict in the Middle East continues to drive up energy prices and inflation rebounds. The risk of energy-driven inflation is disrupting market consensus that central banks around the world were about to shift toward easing.