- Decision
- Maintain
- Rate change
- 0 bps
- bank rate
- 4.5%
The Bank of England’s Monetary Policy Committee kept Bank Rate unchanged at 4.5% on 19 March by an 8–1 vote, judging that significant but incomplete progress on disinflation alongside still-elevated domestic price and wage pressures warranted maintaining a restrictive stance while assessing mixed signals on growth. After February’s 25 bp cut that brought the rate to its current level, the Committee noted slightly firmer-than-expected GDP data yet persistent survey evidence of weak activity and softening employment intentions, with Bank staff now seeing Q1 growth of about 0.25%. Twelve-month CPI inflation rose to 3.0% in January, is projected to peak near 3¾ % in 2025 Q3 before easing back toward the 2 % target, and private-sector regular pay growth remains high at 6.1% even as underlying measures cool. Sterling has firmed and gilt yields have edged up amid rising global financial-market volatility, fuelled by heightened trade and geopolitical tensions and contrasting moves in US and euro-area policy expectations; energy prices have fallen but stay above year-earlier levels. The MPC reaffirmed that policy must stay restrictive “for sufficiently long” and signalled a gradual, data-dependent path to any further withdrawal of restraint, emphasising two-sided risks from potential demand weakness versus lingering domestic cost pressures.
Rate evolution
Since June 2025, the Bank of England has cut Bank Rate by 50 basis points from 4.25% to 3.75%, with reductions in August and December, an autumn pause and holds in April, June, July and September 2026, citing substantial disinflation, weak GDP growth, a loosening labour market and moderating pay. The Monetary Policy Committee remained vigilant over services inflation, expectations and wage and price persistence as administered, food and energy prices lifted headline CPI inflation, but by late 2025 and early 2026 it judged persistence risks less pronounced and weaker demand more apparent as CPI inflation peaked and pay and services inflation eased further, while retaining a gradual, non-pre-set easing bias.
In April, the Committee voted 8-1 to maintain Bank Rate at 3.75%, with one member preferring an increase to 4%, as the Middle East conflict raised the energy price outlook and CPI inflation increased to 3.3%, flagging risks of second-round effects while noting that a loosening labour market, a weakening economy and tighter financial conditions could contain inflationary pressures. It held Bank Rate at 3.75% by a 7-2 vote in June as CPI inflation fell to 2.8% and global energy prices declined but remained above pre-conflict levels and volatile, then held again by a 6-3 vote on 29 July, when three members preferred an increase to 4% and persistent energy-price volatility and second-round risks tilted inflation risks upward despite continued underlying disinflation and a fall in CPI inflation to 2.6%.
At its meeting ending on 16 September, the Committee maintained Bank Rate at 3.75% by another 6-3 vote, with three members again preferring an increase to 4%, as the protracted Middle East conflict drove further increases in volatile energy prices and CPI inflation rose to 3.1% in August. It noted little evidence so far of material second-round effects and said soft labour market conditions and higher interest rates faced by households and businesses would reduce inflation over time despite slightly stronger activity, but judged that risks to the inflation outlook had tilted further to the upside since July.