BoE Holds Base Rate at 3.75%, Markets Expect Further Increases Ahead

The Bank of England has maintained its base rate at 3.75%, as per the Monetary Policy Committee's (MPC) six to three vote in favor of holding interest rates.

This decision comes after the MPC lowered the base rate from 4% to 3.75% in December 2025, and it has remained unchanged since then.

The UK's inflation rate rose from 2.9% in July to 3.1% in August, according to the Office for National Statistics, with the MPC attributing this increase to protracted conflict in the Middle East and subsequent rises in oil and energy prices.

Richard Pike, sales and marketing director at Phoebus Software, noted that the decision to hold the base rate was 'widely expected', but expressed concerns about the path ahead: 'The sharp rise in oil prices over recent weeks is another potential source of upward pressure as we head into autumn.'

Harriet Guevara, chief savings officer at Nottingham Building Society, also warned that markets are expecting further increases to the base rate in the coming months.