Economists are predicting that Bank of England rate-setters will "almost certainly" keep the base rate unchanged at 3.75 per cent when the Monetary Policy Committee convenes on Thursday.
This would represent a blow to borrowers, who are hoping for relief on mortgage and debt repayments, but could be a boon for savers looking for higher interest rates from accounts.
The nine-member panel is expected to maintain its current stance despite the ongoing conflict between US-Israeli and Iranian forces pushing living costs higher since late February.
Official figures released last week revealed UK inflation climbed to 3.3 per cent in March, reaching a three-month peak as the Middle East crisis sent fuel costs soaring.
Economists are forecasting the Bank of England will 'almost certainly' hold off on cutting the base rate this week
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Thursday's decision will be accompanied by the Bank's first comprehensive monetary policy report and economic projections since hostilities commenced.
Motor fuel prices surged by 8.7 per cent in a single month during March, marking the steepest monthly jump since June 2022 as disruptions to oil production and shipping routes pushed petrol and diesel costs sharply upward.
Bank of England research published on Friday showed British businesses now anticipate food price rises could hit seven per cent as they revised their inflation expectations for the coming year.
Economic activity has also proved more robust than anticipated, with ONS data showing the UK economy expanded by 0.5 per cent in February, well ahead of the 0.1 per cent growth economists had forecast.
Bank of England interest rates over time | Bank of England LATEST DEVELOPMENTS
High street banks are looking for ways to entice new customers | GETTYThomas Pugh, chief economist at RSM UK, described the outcome as "nailed on", stating: "The Bank of England will almost certainly hold interest rates at 3.75 per cent at its meeting next week, most likely in a unanimous nine-to-zero vote again."
He added: "The picture of the war in Iran is little clearer than at the last meeting, and the value in waiting for more information is significant, given the uncertainty over both the future direction of energy prices and their impact on the economy."
Andrew Goodwin, chief UK economist at Oxford Economics, suggested most committee members appear "keen to hold policy at its current restrictive level as they gather more information about how the energy shock is feeding through to the economy."
Despite expectations of a hold this week, economists warn that rate increases could materialise in the coming months if inflationary pressures persist.
Is the Bank of England cutting interest rates fast enough? | GETTY Mr Pugh noted that the "resilience" of recent economic data "raises the risk that interest rates will rise in the summer".
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, cautioned: "If surveys for May repeat the same pattern, and crucially the 'dirty' Middle East ceasefire continues with oil flows disrupted, we think the MPC will be bumped into a hike in June or perhaps July."
Pantheon forecasts a single rate increase this year in June, followed by two cuts in 2027, bringing rates down to 3.5 per cent.
Katie Horne, savings expert at Flagstone, shared: "A vote to keep the base rate at 3.75 per cent will mean competition among banks for savers' cash will remain high.
"Banks will have to continue to fight for every pound in savers' pockets in this higher-than-planned interest rate environment. Traditionally by this point in the ISA cycle, banks remove products from offer and savers enjoy the last of their introductory bonus rates."