Bank of England's Monetary Policy Committee expected to hold the Bank Rate at 3.75% on 17 September amid rising inflation and global rate hikes

The Bank of England's Monetary Policy Committee (MPC), a nine-member body responsible for setting the UK's benchmark interest rate, was widely expected by economists to hold the Bank Rate at 3.75% at its meeting on 17 September 2026, with the decision due at 12:00 BST. The hold would mark a sixth consecutive meeting without a change. However, analysts are increasingly divided on whether a rate rise will be needed before the end of the year. The backdrop is a sharp deterioration in the global inflation environment: UK CPI (Consumer Prices Index) inflation rose to 3.1% in August from 2.9% in July, driven by petrol, diesel, and airfare costs. Oil prices have remained above $100 a barrel since 9 September. The European Central Bank recently raised its rate to 2.5%, and the US Federal Reserve raised its rate to 3.75%-4% on the day before the MPC meeting. Governor Andrew Bailey had previously said that if the Iran conflict continued and oil stayed above $100, 'the odds are that interest rates will have to go up higher'. Mortgage market consequences are already visible: the average two-year fixed residential mortgage rate reached 5.77%, its highest since 11 May, and the average five-year rate hit 5.83%, its highest since 8 November 2023.

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