Bank of England holds rates, but three policymakers vote for hike

30th Jul 2026 07:13

(Sharecast News) - The Bank of England kept interest rates unchanged on Thursday, as widely expected, although three policymakers voted for tighter monetary policy amid concerns over energy prices and persistent inflationary pressures.

The nine-person Monetary Policy Committee voted six to three to maintain Bank Rate at 3.75%, with Megan Greene, Catherine Mann and Huw Pill preferring a 25-basis-point rise to 4%.

The Bank highlighted that crude and refined energy prices had remained volatile and above levels seen before the conflict in the Middle East, leaving the impact of the energy shock on the UK economy uncertain.

Since the last MPC meeting, consumer price inflation has fallen to 2.6%, but is expected to rise later in 2026 as higher energy costs continue to feed through.

"The risk of material second-round effects in price and wage-setting, against which policy needs to lean, is greater the longer higher energy prices persist," the BoE said in a statement.

However, it added that there was "little evidence so far" to suggest such effects, given "clear signs" of underlying disinflation in recent data.

"Loose labour market conditions, and higher interest rates faced by households and businesses than prior to the conflict, will also act to reduce inflation over time," it said.

However, risks to the inflation outlook are still "tilted to the upside", the central bank added.

The six members backing unchanged rates said holding policy, alongside tighter financial conditions, provided sufficient protection against inflation risks while allowing more evidence to emerge.

The Bank said it "stands ready to act as necessary" to ensure inflation returns sustainably to its 2% target over the medium term.