Bank of England Holds Rates Amid Rising Energy Costs and Inflation Risks
The Bank of England maintained its interest rate at 3.75% in September 2026, but signaled that higher energy costs could lead to tighter monetary policy if inflation becomes more entrenched.
The decision was made by a 6-3 majority, with three Monetary Policy Committee members voting for an immediate quarter-point increase to 4%. The Bank now expects consumer-price inflation to rise from 3.1% in August to around 3.75% in the fourth quarter of 2026 and slightly above 4% in early 2027.
The prolonged conflict in the Middle East has increased global energy costs, lifting Brent crude prices by 36% and UK wholesale gas prices by 78%. The Bank warned that indirect effects through companies' supply chains could become more visible over coming quarters.