BoE Holds Rate, GBP Weakens Amid Inflation Fears

The Bank of England (BoE) kept its Bank Rate at 3.75% in a 6-3 vote, acknowledging a more challenging inflation backdrop.

CPI is expected to rise to around 3.75% in Q4 and slightly above 4% in early 2027, largely due to higher energy prices, according to the BoE.

The BoE noted that there has been little evidence so far of material second-round effects in wages and prices.

Gilts rallied on a QT overhaul, with 30y yields falling around 12bp.