Faisal Islam: The wide field of uncertainties facing the UK

Faisal Islam: The wide field of uncertainties facing the UK5 minutes agoShareSaveAdd as preferred on GoogleFaisal IslamEconomics editorMike Kemp/In Pictures via Getty ImagesNo interest rate rise is going to force an oil tanker through the Strait of Hormuz, or clear the "hazardous area" of mines. The Bank of England repeatedly made the point in its latest meetings' minutes and new numbers that the bigger picture is out of anyone's control - at least here in Britain.There was an important message, however, in the deliberations and forecasts around the decision to hold rates. Rate cuts are definitely off the agenda, some form of rate rise is more likely than not, and if oil prices sustain at Thursday morning's $125 peak for the rest of the year, rates might need to go above 5% this year.Essentially the Bank was trying to provide detail around some of the "ifs" and "maybes" to manage expectations of what outcomes are plausible if the Gulf impasse lasts several months. The recent sharp fall in oil prices after the announcement of the ceasefire was built on the assumption of the return to some sort of normality within days or weeks.'Difficult circumstances'What on earth are households - already squeezed at the petrol pumps, facing a rise in the price of gas and electricity in the summer, food prices too - supposed to think about a significant spike in mortgage costs?I put that question to the Bank of England governor, Andrew Bailey. He responded: "These are very difficult circumstances. This is a major increase in energy prices. No question about that. "It's a very big shock in that sense and of course, it is felt by households. "Inflation is bad for everybody, but it's particularly bad for the least well off. Things like energy and food [makes up] a much bigger proportion of spending by those on lower incomes and so we have to be very, very sensitive to that. "So this is a difficult situ...