The Bank of England has held interest rates at 3.75% on 17th September 2026 but warned that persistently high energy costs could force rates higher.
The Monetary Policy Committee voted 6-3 to keep Bank Rate unchanged, while three members backed an increase to 4%.
Governor Andrew Bailey reportedly said the outlook remained uncertain, with rising energy prices creating renewed inflationary pressure.
UK inflation reached 3.1% in August 2026 and the Bank expects it to rise further, potentially exceeding 4% in early 2027 if energy costs remain elevated.
Bailey reportedly said that if the Middle East conflict persists and inflationary risks increase, monetary policy may need to tighten.