BoE Holds Rates Steady Amid Ongoing Energy Shock

The Bank of England's Monetary Policy Committee (MPC) held rates steady at 3.75% on September 16, 2026, as expected by markets.

A minority of three members voted for a 25-basis-point increase to 4%, but the majority agreed that no change was necessary given current economic conditions.

The prolonged conflict in the Middle East has driven up crude and refined energy prices, contributing to a rise in UK Consumer Price Index (CPI) inflation to 3.1% in August. The MPC expects further increases in coming quarters due to the ongoing energy shock.

However, there is currently limited evidence of significant second-round effects on wages and prices, although this risk could increase if energy costs remain elevated.