The Bank of England is widely expected to leave interest rates unchanged at 3.75% as policymakers take a cautious stance on whether higher energy prices linked to the Iran conflict could trigger longer-lasting inflation pressures. UK inflation has stayed above the central bank’s 2% target for most of the past five years, with the BoE previously warning it could rise above 3.5% later this year. However, inflation remained steady at 2.8% in May, unchanged from April’s 13-month low and below the BoE’s expectations. Also, markets have gained some reassurance from the possibility of a US-Iran agreement that could reopen the Strait of Hormuz and reduce the risk of energy-driven price spikes. Nevertheless, policymakers remain concerned that companies could pass higher costs through the economy or that public confidence in the inflation target could weaken.