BoE Stays Put at 3.75%, But Hawks Get Louder

The Bank of England (BoE) kept its key interest rate at 3.75%, but the decision was not unanimous, as the Monetary Policy Committee (MPC) split 6-3.

The three dissenting members, Catherine Mann, Megan Greene, and Chief Economist Huw Pill, wanted to raise the rate to 4% due to concerns that an energy-led jump in prices could lead to higher inflation and affect pay deals and broader pricing.

The majority, led by Governor Andrew Bailey, argued that the UK's homegrown picture looks calmer, pointing to a softer labor market and slower private-sector pay growth as reasons to wait on rate hikes.

The BoE's forecast still has inflation rising to 3.2% later this year from 2.6% in June and staying above the 2% target until early 2028, even if energy prices follow market expectations and knock-on effects stay limited.