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June 18, 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 June meeting.
The conflict in the Middle East has created significant global energy price uncertainty, which cannot be addressed via monetary policy. However, policy will be set to ensure that economic adjustments to higher energy prices do not occur in a way that jeopardizes the 2% inflation target. The measures required to achieve this will depend on the scale and duration of the shock, and how it is distributed throughout the economy.
CPI inflation rose to 2.8% in May and is likely to trend higher as the effects of higher energy prices pass through. Household inflation expectations had picked up since the start of the conflict. Tighter financial conditions since the beginning of the conflict will also help to reduce inflation over time.
UK GDP had grown 0.6% in Q1 2026. With unwinding momentum from strong Q1 growth, GDP declined in April by 0.1%. Bank staff estimated that underlying quarterly GDP growth had been around 0.2% in Q1 and would remain at around that rate in Q2.
Labour Force Survey unemployment rate has fallen to 4.9% in the three months to April. Employment has groms by 0.3%, but underlying employment growth had remained close to zero. Vacancies declined by 2.6% in three months to May. Overall, this leads to a loosening in the labour market.
The Committee is vigilant in monitoring the conflict development in the Middle East and its impact on global energy supply. Monetary policy cannot influence global energy prices, but it aims to ensure that the economic adjustment to them occurs in a way that achieves the 2% target inflation.
The next scheduled monetary policy meeting will be on July 30, 2026.
Source: Bank of England, Monetary Policy Summary, June 2026