New Delhi, May 1 -- The Bank of England is expected to announce Thursday that it is keeping interest rates on hold as policymakers assess the economic impact of the Iran war and Tehran's effective closure of the Strait of Hormuz, through which a fifth of the world's crude passes in peacetime.

Economists said the nine-member panel may hint that interest rates could increase in the months to come if the conflict in the Middle East - where a shaky ceasefire is for now holding - puts more upward pressure on U.K. inflation.

For now, the Monetary Policy Committee is expected to keep the bank's main rate at 3.75%, with one or two members possibly voting for a quarter-point hike as a preemptive measure against higher inflation.

Before the war,...