ISTANBUL

The Bank of England has kept its policy interest rate constant at 3.75%, in line with market expectations.

"Conflict in the Middle East has caused a significant increase in global energy and other commodity prices, which will affect households’ fuel and utility prices and have indirect effects via businesses’ costs, the bank said on Thursday.

It added that consumer inflation will be higher in the near term as a result of the new shock to the economy.

The bank stressed that monetary policy cannot influence global energy prices but aims to ensure that the economic adjustment to them occurs in a way that achieves the 2% target sustainably.

"The Committee will continue to monitor closely the situation in the Middle East and its impact on global energy supply and energy prices," it said.