Ramsden Warns UK Interest Rates May Rise Amid Inflation Pressures

Deputy Governor Dave Ramsden of the Bank of England warned that interest rates may need to rise if inflation pressures continue to build. In a speech to London's Money Macro and Finance Society, Ramsden stated that while current policy is restrictive, there could be a case for increasing Bank Rate if upside pressures on the inflation outlook strengthen further.

Ramsden was part of the 6-3 majority on the BoE's Monetary Policy Committee who voted to keep interest rates on hold this month. The Bank of England last held rates in mid-2026 at 3.75%, with policymakers vigilant and ready to act if inflation risks persist.

The Deputy Governor emphasized that energy shocks from Middle East tensions remain a key upside risk to inflation, potentially fueling second-round effects in wages and prices. Unlike the European Central Bank and the US Federal Reserve, the BoE has not increased interest rates since the start of the Iran war, partly because its policy stance was already restrictive.