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February 05, 2026BANK OF ENGLAND MONETARY POLICY The Monetary Policy Committee (MPC) of the Bank of England voted to maintain the Bank Rate at 3.75% in their February meeting.
Global activity has been more resilient than expected at the time of the November Report, suggesting tariffs and trade uncertainty are not weighing on global economic activity to the extent that had been expected. Easier global conditions have supported international markets and AI investment has supported growth in some regions. The Monetary Policy Committee has judged that underlying price and wage pressures continued to ease.
Headline CPI inflation was 3.4% in December, slightly lower than expected in the November Monetary Policy Report. Despite inflation above 2%, the Bank staff expect headline inflation to fall to around the target starting in April. The Monetary Policy Committee has judged that underlying price and wage pressures continued to ease.
UK GDP is estimated to have grown 0.1% in Q4 2025 down from 0.2% in Q3 2025 and lower than headline GDP growth. Underlying growth is expected to pickup in Q1 2026 supported by a robust public sector output.
The unemployment rate remained at 5.1% in the three months to November and measures of recruitment difficulties have eased. The level of job vacancies has been stable since the summer and employment growth had remained around zero over the past year. The Bank expects some further loosening in the labour market in the near term.
The Committee judged that a careful approach to the further withdrawal of monetary policy restraint remained appropriate. The timing and pace of future reductions in the restrictiveness of policy would depend on the extent to which underlying disinflationary pressures would continue to ease. Current evidence suggest a gradual downward path for the Bank rate, but the Committee would remain responsive to the accumulation of evidence.
The next scheduled monetary policy meeting will be on March 19, 2026.
Source: Bank of England, Monetary Policy Summary, February 2025; Monetary Policy Report February, 2026
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