BoE Holds Rates but Hints at Future Hikes Amid Energy Price Uncertainty

The Bank of England's Monetary Policy Committee (MPC) has held interest rates at 3.75% in their July meeting, a decision made by a vote of six to three.

The MPC members who voted for a rate hike wanted to increase the Bank rate by 25 basis points to 4%, but this was not enough to sway the majority.

Despite keeping rates unchanged, the Bank of England noted that CPI inflation has fallen to 2.6% since the previous meeting, although it is expected to rise later this year as higher energy prices continue to pass through.

The MPC highlighted that the impact of the energy shock on the UK economy 'remains uncertain', and while monetary policy cannot influence energy prices, it aims to ensure economic adjustment occurs in a way that achieves the 2% inflation target sustainably.