Bank of England Holds Base Rate at 3.75% Amid Energy Price Uncertainty

The Bank of England has kept its base rate at 3.75% amid concerns that higher energy costs could push inflation upwards later this year.

The Monetary Policy Committee voted six to three to leave the rate unchanged, with the dissenting members favouring an increase of 0.25 percentage points to 4%.

The Bank warned that the scale, duration and wider economic effects of the energy shock remain uncertain, but noted that consumer price inflation has fallen to 2.6% since the previous meeting.

Despite the rate hold, lenders are expected to remain cautious as funding costs and mortgage rates remain high, while higher gilt yields and fiscal uncertainty support disciplined lender prices.