The Bank of England kept its key interest rate on hold for the fifth time this year on Thursday after a bigger-than-expected drop in the inflation rate last month gave policymakers breathing space to assess the fallout from renewed fighting in Iran. The bank’s monetary policy committee voted 6-3 to keep the rate at 3.75%, in line with the expectations of most economists. Policymakers have kept the rate at that level since December after four rate cuts in 2025. Adjusting central bank interest rates, which serve as a benchmark for loans and credit cards, is the primary tool central banks use to control inflation. While the drop was bigger than economists expected, inflation remained above the bank’s 2% target for a 21st consecutive month.