The Bank of England’s Monetary Policy Committee (MPC) voted unanimously to hold Bank Rate at 3.75 % at its 18 March meeting, judging that the sharp, conflict-driven jump in global energy and commodity prices—Brent crude above USD 100/bbl and European gas near EUR 50/MWh—will lift near-term inflation while dampening activity, with policy best left unchanged to assess the balance of risks. After three 25 bp cuts between May and December 2025, the rate has been on hold since February. The operating stance is maintained with the stock of UK government bonds in the Asset Purchase Facility at GBP 528 bn. CPI inflation, 3.0 % in January, is now expected to run around 3–3½ % over the next two quarters—about ½ pp higher than envisaged in February—amid slowing private-sector regular pay growth (3.3 % y/y in the three months to January), flat January GDP and only 0.1–0.2 % underlying growth in Q1, and an unchanged 5.2 % unemployment rate; broad money (M4ex) is growing 3.6 % y/y. The conflict has also tightened global financial conditions, with UK corporate spreads wider and the dollar stronger. Stressing vigilance against energy-led second-round effects but also mindful of potential slack from weaker demand, the MPC reiterated it is “ready to act as necessary” to keep inflation on course for the 2 % target.
Bank of England 2026-03-19
Bank of England holds Bank Rate at 3.75%
Bank of England’s Monetary Policy Committee left Bank Rate unchanged at 3.75 % and kept gilt holdings at GBP 528 bn, following three 25 bp cuts between May and December 2025. Citing conflict-related spikes in energy and commodity prices, the MPC now sees CPI at 3–3.5 % in coming quarters and said it stands ready to act if second-round effects jeopardise the 2 % target.