BoE Holds Rates at 3.75%, Eyes Labour Market for Inflation Relief

The Bank of England's Monetary Policy Committee (MPC) made its decision to hold interest rates at 3.75% for the fifth consecutive time on July 30, 2026. The vote was split, with six members voting to maintain the rate unchanged and three opting for a 25bps increase to 4%. The BoE's MPC stated that loose labour market conditions and higher interest rates faced by households and businesses would contribute to reducing inflation over time.

The decision comes as the UK continues to navigate the aftermath of conflict. The BoE's MPC noted that the current economic landscape will act to reduce inflation, but it remains uncertain how long it will take for inflation to return to target.