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Bank of England keeps Bank Rate at 3.75% after July meeting

The MPC voted 6-3 to hold at 3.75%, citing uncertainty around Middle East driven energy volatility and saying CPI inflation has eased to 2.6% since the prior meeting.

Reported · Written up by our desk · Central Banks

The Bank of England kept its Bank Rate unchanged at 3.75% at a Monetary Policy Committee meeting ending 29 July 2026, according to Action Forex. The MPC decision passed by a 6-3 vote, with three members dissenting in favor of a 0.25 percentage point increase to 4%.

The policy discussion centered on how Middle East events have left crude and refined energy prices volatile and higher than pre-conflict levels. The MPC said the impact of this energy shock on the UK economy remains uncertain, noting that monetary policy cannot directly affect energy prices but must support a sustainable path to the Bank’s 2% inflation target.

Action Forex also reported that CPI inflation has fallen to 2.6% since the previous meeting, while the MPC expects it to rise later in the year as higher energy prices feed through. The committee said the risk of second-round effects in prices and wage setting is greater the longer elevated energy prices persist, even as recent data show clear signs of underlying disinflation.

The MPC judged it was appropriate to maintain Bank Rate, and said it stands ready to act as needed to keep CPI inflation on track to meet the 2% target over the medium term, alongside expectations that loose labor market conditions and higher interest rates faced by households and businesses will weigh on inflation over time.

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