BOE Keeps Rates at 3.75%, Analysts Divided on Next Move

The Bank of England held its base rate at 3.75% on July 30th in a divided vote, with three policymakers voting to raise it to 4%. The decision was described as 'hawkish' by analysts, reflecting growing concerns about inflation.

Governor Andrew Bailey said that inflation has fallen faster than expected, but warned of the ongoing impact of energy prices and the Middle East conflict. Analysts are divided on what will happen next, with some expecting a hold at 3.75% for the rest of 2026 and others predicting a hike.

The market is pricing in a base rate rise to around 4.2% by the second half of 2027, according to XTB's economic calendar. However, traders are paying to protect against rate rises rather than expecting them.