Bank of England Keeps Rates Steady

2026-09-17 11:01 By Agna Gabriel 1 min. read

The Bank of England’s Monetary Policy Committee voted 6–3 to keep Bank Rate unchanged at 3.75% at its September 16, 2026 meeting, in line with market expectations.

Three members preferred a 25-basis-point increase to 4%, the same as at the July meeting.

The MPC said prolonged conflict in the Middle East has pushed crude and refined energy prices higher and increased volatility, contributing to a rise in UK CPI inflation to 3.1% in August, with further increases expected in coming quarters.

The Committee stressed that policy must ensure inflation returns sustainably to the 2% target while assessing the scale and duration of the energy shock.

So far, there is limited evidence of significant second-round effects on wages and prices, although the risk could increase if energy costs remain elevated.

The MPC also unanimously agreed to reduce its stock of government bond purchases to zero through a multi-year programme, unwinding holdings at an average annual pace of £46 billion through 2034.



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Bank of England Keeps Rates Steady
The Bank of England’s Monetary Policy Committee voted 6–3 to keep Bank Rate unchanged at 3.75% at its September 16, 2026 meeting, in line with market expectations. Three members preferred a 25-basis-point increase to 4%, the same as at the July meeting. The MPC said prolonged conflict in the Middle East has pushed crude and refined energy prices higher and increased volatility, contributing to a rise in UK CPI inflation to 3.1% in August, with further increases expected in coming quarters. The Committee stressed that policy must ensure inflation returns sustainably to the 2% target while assessing the scale and duration of the energy shock. So far, there is limited evidence of significant second-round effects on wages and prices, although the risk could increase if energy costs remain elevated. The MPC also unanimously agreed to reduce its stock of government bond purchases to zero through a multi-year programme, unwinding holdings at an average annual pace of £46 billion through 2034.
2026-09-17
Bank of England Set to Hold Rates
The Bank of England is expected to keep Bank Rate unchanged at 3.75%, although policymakers are likely to retain a hawkish bias because inflation risks have increased amid higher energy prices. August CPI rose to 3.1% year-on-year, while producer-price inflation also accelerated, highlighting persistent pipeline pressures. However, weaker labour-market conditions, moderating wage growth and limited evidence of second-round inflation effects support the case for holding rates. Markets expect the July 6–3 vote split to remain, with Pill, Greene and Mann favouring a 25-basis-point hike. The MPC is also expected to slow quantitative tightening from £70 billion to around £50 billion over the next year, largely because fewer gilts are maturing. Active sales may remain near £20 billion, potentially excluding long-dated bonds. Overall, the Bank is likely to wait for clearer evidence that energy-price pressures are becoming embedded in domestic inflation before tightening policy.
2026-09-17
BoE Leaves Rates Unchanged, Flags Inflation Risks
The Bank of England left its Bank Rate unchanged at 3.75% at its July meeting, with a 6-3 majority in favor of holding rates steady, while three policymakers preferred a 25-basis-point increase to 4.0%. The decision reflects a balance between easing inflation and persistent risks from higher energy prices following recent tensions in the Middle East. Although consumer price inflation has slowed to 2.6%, the Bank expects it to rise again later this year as higher energy costs feed through to households and businesses. Encouragingly, there is little evidence so far of significant second-round inflation effects, while weaker labor market conditions and still-elevated borrowing costs are helping reduce underlying inflationary pressures. Nevertheless, the Committee believes inflation risks remain tilted to the upside due to geopolitical uncertainty and stands ready to tighten policy further if necessary to ensure inflation returns sustainably to its 2% target.
2026-07-30