The Bank of England's decision to hold rates at 3.75% signals a more cautious stance as rising energy prices threaten to keep inflation elevated. Policymakers warned that a prolonged shock could feed into wages and broader prices, reducing the likelihood of near-term rate cuts and reopening the door to further tightening. This leaves the UK economy facing weak growth alongside renewed inflation risks, complicating the policy outlook as recent data had suggested easing pressures. Markets interpreted the hold as hawkish, rapidly repricing interest rate expectations. Gilt markets sold off sharply, with two-year yields rising above 4.4% and 10-year yields approaching multi-year highs