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September 17, 2026BANK OF ENGLAND MONETARY POLICY The Monetary Policy Committee (MPC) of the Bank of England voted to maintain the Bank Rate at 3.75% at its September meeting.
The conflict in the Middle East remains the dominant source of uncertainty for the inflation outlook. Protracted conflict has contributed to further increases in crude oil and refined energy prices, which remain more volatile and higher than pre-conflict levels. While monetary policy cannot directly influence global energy prices, the MPC stated that policy will be set to ensure inflation returns sustainably to the 2% target as the economy adjusts to the energy shock. The policy response required will depend on the scale and persistence of the shock and how it propagates through the economy. The Committee judges that risks to the inflation outlook are tilted to the upside and stands ready to act as necessary to ensure inflation returns sustainably to target.
CPI inflation increased to 3.1% in August, up from earlier summer readings. Inflation is expected to rise further in the coming quarters as higher energy prices continue to pass through to households and businesses. The MPC noted that there has been little evidence so far of second-round effects in wage and price setting, although the risk of such effects increases the longer elevated energy prices persist or remain volatile.
UK economic activity has been slightly stronger than expected in recent months. While the economy has shown resilience, the outlook remains uncertain, and the evolution of growth will depend in part on the scale and persistence of the energy shock and its effects on households and businesses.
The MPC noted that labour market conditions remain soft and are expected to help reduce inflationary pressures over time. Soft labour market conditions, together with higher borrowing costs faced by households and businesses, are expected to weigh on demand and support the return of inflation to the 2% target.
The MPC judged that maintaining Bank Rate at 3.75% remains appropriate at this stage. They emphasized that risks to the inflation outlook remain tilted to the upside and that it stands ready to act as necessary to ensure inflation returns sustainably to the 2% target.
The next scheduled MPC monetary policy announcement is due on 5 November 2026.
Source: Bank of England, Monetary Policy Summary, September 2026
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