The Bank of England has raised its key interest rate to 4% amid a deepening cost-of-living crisis driven by surging energy prices linked to the Iran conflict.

The Bank of England has kept its benchmark interest rate frozen at 3.75 per cent, marking the fifth consecutive meeting borrowing costs remained unchanged.

The Bank of England kept interest rates at 3.75% following a tighter 6-3 vote, as policymakers warn that ongoing energy price volatility could keep inflation elevated.