Financial News: Bank Of England Holds Key Rate In 6-3

Bank Of England Holds Key Rate In 6-3 MPC Split

07/30/2026 - 10:10:00 (RTTNews)

(RTTNews) - The Bank of England maintained its interest rate in a split vote as renewed tensions in the Middle East reignited fears of high inflation becoming persistent.

The Monetary Policy Committee, led by Governor Andrew Bailey, voted 6-3 to hold the bank rate at 3.75 percent, which is the lowest rate since June 2023.

Previously, the central bank had reduced the rate by 25 basis points each in August and November last year.

A majority of MPC members said holding the interest rate steady, combined with the significant tightening of financial conditions that had occurred since the conflict started, was providing sufficient insurance against the upside risks to inflation stemming from fluctuations in energy prices.

This time, policymaker Catherine Mann joined peers Megan Greene and Huw Pill in seeking a quarter-point rate hike. The trio felt that a proactive increase in Bank Rate would reduce the probability of second-round effects setting in.

The BoE announcement came a day after the U.S. Federal Reserve left its interest rate unchanged for the fifth consecutive meeting, and three members voted for a rate hike.

The U.K. central bank expects inflation to rise to 3.2 percent in October and November before easing a little.

Underlying economic growth is projected to weaken slightly in the coming quarters as subdued momentum persists and the effects of the Middle East conflict weigh somewhat on demand, the BoE assessed. Underlying growth is forecast to ease to around zero percent in the third quarter, the bank said.

Headline GDP growth is expected to have been higher than underlying growth, at 0.3 percent in the second quarter of 2026.

"The upshot is that unless the situation in the Middle East gets particularly dire, we think the Bank will continue to keep rates on hold through 2026, before cutting rates twice from next spring," ING economist James Smith said.

The Confederation of British Industry economist Alpesh Paleja said interest rates will likely remain on hold for now as inflation and wage data come in lower than previously expected.

Moreover, the BoE may also wait for greater clarity on the fiscal outlook as we head towards the new Chancellor's first Budget in the Autumn, Paleja added.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

French Private Sector Growth Rebounds (12 min(s), 47 sec(s) ago)
(RTTNews) - France's private sector activity returned to growth in September and marked the fa ...Full Story»

Dutch Q2 GDP Growth Revised Higher (14 min(s), 47 sec(s) ago)
(RTTNews) - The Dutch economic growth improved more than estimated initially in the second quarte ...Full Story»

Australia Private Sector Growth Eases To 3-Month Low (01 hr(s), 18 min(s), 47 sec(s) ago)
(RTTNews) - Australia's private sector grew at the slowest pace in three months in September, ...Full Story»

Indonesia Rate Decision On Tap For Wednesday (13 min(s), 13 sec(s) ago)
(RTTNews) - The central bank in Indonesia will wrap up its monetary policy meeting and then announ ...Full Story»

Slovenian Consumers More Pessimistic In September (37 min(s), 13 sec(s) ago)
(RTTNews) - Consumers in Slovenia remained slightly more pessimistic in September, and the confide ...Full Story»

Belgian Consumer Confidence Weakens In September (02 min(s), 13 sec(s) ago)
(RTTNews) - Households in Belgium expressed a more pessimistic attitude in September as they expre ...Full Story»

Spain Trade Gap Widens In July (27 min(s), 13 sec(s) ago)
(RTTNews) - Spain's foreign trade deficit increased notably in July from a year ago as imports ...Full Story»

Taiwan Export Order Growth Accelerates To 71.4% (51 min(s), 13 sec(s) ago)
(RTTNews) - Taiwan's export order growth quickened for the third straight month in August, dat ...Full Story»