The Bank of England's chief economist, Huw Pill, has called for an immediate rise in interest rates from 3.75 per cent to 4 per cent, warning that the war in Iran risks driving up UK inflation. He criticised the Bank's nine-member Monetary Policy Committee for taking a "wait-and-see" approach, arguing that delaying action risks letting monetary policy fall behind emerging inflationary pressures and signals a "bias to the status quo".

Speaking at the Edinburgh Chamber of Commerce, Pill said six months on from the conflict's onset, its economic implications remain as unclear as ever, so policymakers should not wait for certainty before acting. He was one of only two MPC members who voted for a rate rise in July, but was outvoted by the majority, including Governor Andrew Bailey, who kept rates on hold at 3.75 per cent. Pill said a prompt increase would send a "clear and unambiguous signal" of the Bank's readiness to tackle inflation risks, though he stressed it need not mark the start of a sustained series of hikes.