The Bank of England has kept its benchmark interest rate at 3.75% for a sixth consecutive meeting, but warned that persistent increases in energy prices could force it to raise borrowing costs again.
The Monetary Policy Committee voted 6-3 to leave the Bank Rate unchanged at its meeting on Thursday, September 17, 2026. Three members wanted the rate increased by 0.25 percentage points to 4 per cent. The same 6-3 split was recorded at the Bank’s previous meeting in July.
The decision came a day after official figures showed UK consumer price inflation had risen to 3.1% in August, above the Bank’s 2% target. The Bank has also been monitoring the impact of the conflict in the Middle East on global oil and gas supplies.
Higher energy prices have pushed up fuel costs and are expected to put further pressure on household energy bills. The Bank said the household gas and electricity price cap for January is now expected to rise substantially more than previously forecast.
Bank of England Governor Andrew Bailey said continued volatility in energy prices could make another increase in the Bank Rate necessary.
The Bank has previously said monetary policy cannot directly control global energy prices, but interest rates can be used to prevent temporary energy shocks from becoming persistent, broad-based inflation.
“If” energy-price volatility persists for longer, the impact on inflation will become larger and the likelihood of a further rate increase will rise, according to the Bank’s latest assessment.
The Bank Rate influences the interest rates commercial banks charge on mortgages, loans and other forms of borrowing, while also affecting returns on savings.
