Two MPC members vote for a quarter-point rise but Bank argues rapid reaction risks creating volatility

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The Bank of England has left interest rates on hold, arguing that reacting too quickly to inflation threats risked creating “undesirable volatility”, as the Iran war weighs on the UK economy.

Seven of the nine-person monetary policy committee voted to keep rates at 3.75% as the MPC weighed the threat of higher inflation against the prospect of an economic slowdown.

Exclusive: Economists find Brexit caused 12% depression in UK exports, most of which is due to leaving single market

Brexit has depressed UK exports to the EU by 12%, and rejoining the customs union would undo only a fraction of the damage, research shared with the Guardian shows.

With the UK’s future relationship with the bloc likely to feature prominently in a potential Labour leadership contest, the economists John Springford and Anton Spisak, of the Centre for European Reform, provide fresh evidence of the damage caused by exiting.

War’s impact on UK cost of living more muted than first forecast suggesting fuel price rises have failed to spill out more widely across UK plc

• UK inflation stays at 2.8% as slowing food prices offset transport costs

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As soon as Iran choked off oil supplies through the strait of Hormuz at the start of March, there were dire warnings about rocketing UK inflation and the drastic action the Bank of England might take to rein it in.

At one point, investors were expecting as many as three quarter-point rises in interest rates before the end of the year – a sharp turnaround from earlier forecasts of rate cuts.

Surprise ONS figure confounds forecasts of an increase to 3% as Bank of England prepares to set interest rates

UK inflation unexpectedly remained at 2.8% last month as higher transport and fuel costs were offset by slower food price rises.

May’s annual price rise reading recorded by the Office for National Statistics (ONS) came despite economists’ forecasts of a rise to 3% as the Middle East restricted global energy flows.

Kate Dearden says reforms such as enhanced sick pay simply bring UK into line with other big economies

Labour’s radical workers’ rights reforms have simply put the UK on a “level playing field” with other big economies, the employment minister, Kate Dearden, has said.

The government’s Employment Rights Act became law last year, with specific provisions being implemented this year and next.

Starmer shows no will to pursue the main options for rising commitments: spending cuts, tax rises or borrowing

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When Keir Starmer wanted to promise Donald Trump that the UK would increase defence spending, he decided to fund it by slashing the UK’s aid budget – losing a cabinet minister, Anneliese Dodds, in the process.

This time around, with John Healey’s Ministry of Defence (MoD) demanding an additional £18.5bn over four years to fund the defence investment plan, there was no such lever to hand.