Bank of England holds interest rates at 3.75% but warns war could force future rises

A major policy shift has sent shockwaves through financial markets as the Bank of England revealed plans to offload billions of pounds in government bonds back to the Treasury, a move aimed at stabilizing the volatile gilt market. While keeping interest rates unchanged for now, officials warned that prolonged conflict in the Middle East could push borrowing costs higher, raising fresh concerns about inflationary pressures. The surprise announcement—coming just weeks before the budget—could reshape public finances and market expectations. Analysts are now assessing how this decision will impact long-term debt management and economic stability.

Central bank announces surprise plan to sell billions of pounds in government bonds back to the TreasuryBusiness live – latest updatesThe Bank of England has kept interest rates on hold as it warned a continuation of the bitter fighting in the Middle East could force it to raise borrowing costs amid mounting fears over inflation.It also announced a surprise plan to sell billions of pounds in UK government bonds back to the Treasury to avoid fuelling turbulence in the gilt market, a decision that could have significant consequences for the public finances before next month’s budget. Continue reading...