The Bank of England held its rate at 3.75 percent on Thursday, with its Monetary Policy Committee voting six to three to leave rates unchanged.

The decision came after UK consumer price inflation fell to 2.6 percent in June, its lowest reading in more than a year.

At a press conference after the decision was announced, BoE governor Andrew Bailey said that the bank may raise rates if the Iran War continues and energy prices feed through to other prices in the economy. 

“If we get a continuation of this conflict going on and oil prices stay above $100 a barrel... the odds are that interest rates will have to go up higher,” Bailey told BBC. 

Bailey added that if the war were to become “credibly resolved,” the BoE would be able to adopt a looser stance.

The Financial Times reports that the committee believes “underlying” GDP is stagnating and will suffer from the energy shock caused by disruptions to the Strait of Hormuz, which continues to “squeeze household incomes.”