Bank of England Defies Inflation Pressure with Sixth Consecutive Rate Hold

The Bank of England has kept its base rate unchanged at 3.75% for the sixth consecutive meeting, despite growing inflation pressure and a widening split within the Monetary Policy Committee.

The decision follows five rounds of inaction since the bank completed its easing cycle in late 2025, and comes against a backdrop of rising energy costs and renewed geopolitical uncertainty that has driven swap rates sharply higher in recent weeks.

Duncan Kreeger, chief executive of commercial mortgage and bridging specialist TAB, welcomed the outcome, saying 'The Bank of England was right to keep interest rates unchanged for the sixth month in a row, despite growing fears of an inflationary upsurge as oil prices climb.'

Kreeger pointed out that higher energy prices could push inflation towards 4% this winter but noted that the number of people in payrolled employment fell by 26,000 in August. He also stated that 'the increase in government bond yields, which move inversely to prices, will naturally cool the UK economy and put downward pressure on inflation.'

Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol, cautioned that despite the hold, mortgage borrowers with fixed-rate deals coming to an end may not see immediate relief.