The Bank of England raised its benchmark interest rate by a quarter point to 4% on Thursday, its first increase in more than three years, as policymakers responded to renewed inflation pressure linked to the U.S.-Iran conflict.

The Monetary Policy Committee voted 8-1 to lift the Bank Rate from 3.75%. The lone dissenter also favored an increase but argued for a larger move, Reuters reported. The Associated Press said every committee member supported raising rates, though members differed over the size of the increase.

Consumer price inflation reached 3.5% in September, above the Bank’s 2% target. The conflict has pushed energy costs higher, adding to pressure on households and businesses. Policymakers said the possibility of further increases would depend on how inflation and the conflict develop.

Higher benchmark rates can raise borrowing costs for households and companies, while also affecting returns on some savings products. The Bank’s decision signals concern that price pressures could persist; it does not determine how quickly individual lenders adjust their rates.

The move comes as central banks weigh whether an energy-driven inflation shock will fade or spread into wider prices and wages. The Bank’s next decisions will depend on incoming inflation and economic data.

Sources: Associated Press; Reuters.