Bank of England holds Bank Rate at 3.75% with three votes to hike

The Bank of England kept Bank Rate at 3.75% on 17 September 2026, but the decision was far from unanimous. According to the Bank's summary, six members of the Monetary Policy Committee voted to hold while three voted for a 0.25 point increase to 4%.

What happened

The majority argued that energy prices have risen further because of the conflict in the Middle East and that the risk of second-round effects, meaning higher prices feeding into wages and then back into prices, is growing. They concluded, however, that evidence of this is still limited and that slack in the economy and tight financial conditions are already restraining inflation. The three dissenters took the view that waiting for clear evidence would leave policy behind events.

The Bank reported UK consumer price inflation of 3.1% in August against a 2% target, and said it expects the rate to climb to around 3.75% in the fourth quarter of 2026 and slightly above 4% in the first quarter of 2027, based on energy prices as of 14 September. The committee also said it stands ready to act if needed.

Separately, the committee voted unanimously to reduce the Bank's gilt holdings to zero over a multi-year plan, with annual sales of 20 billion pounds alongside maturing bonds and completion expected by September 2034.

Why it matters for traders

A split vote tells the market that the next decision is genuinely open. Sterling pairs and UK index CFDs can react sharply to each inflation, wage and energy-price release because those data points now move expectations about the committee's next step. Expect wider spreads and faster price gaps around those releases.

The gilt plan is a slower-moving theme. Larger supply of government bonds can influence UK yields over time, and yields are one input into how sterling and rate-sensitive sectors trade.

What to watch

• The next Bank Rate decision, listed by the Bank for the following meeting, and the votes behind it.
• UK inflation and wage releases, which are scheduled in advance on the ONS and Bank calendars.
• Your broker's trading conditions during these events, including any margin changes it announces ahead of time.