Bank of England Holds Rates at 3.75% Amid Rising Inflation Risks
The Bank of England decided to keep its benchmark interest rate at 3.75% on Thursday, despite concerns that inflation risks are rising due to energy price increases.
The Monetary Policy Committee voted 6-3 in favor of maintaining the current rate, with three members preferring a 25-basis-point increase to 4%. This marks the sixth consecutive meeting where the Bank has kept the 3.75% rate unchanged since December 2025.
The decision comes as official data shows UK consumer-price inflation accelerated to 3.1% in August, well above the Bank's 2% target. Energy prices have risen significantly since July, and the central bank warns that if these elevated prices persist, they could feed into wages and broader price-setting.
Bank Governor Andrew Bailey cautioned that policymakers may need to tighten monetary policy if the conflict in the Middle East persists. The Bank also approved a new quantitative-tightening plan to reduce its remaining government-bond holdings used for monetary policy to zero by 2034.