The Bank of England on Thursday kept its key interest rate unchanged at 3.75%, opting for caution amid emerging inflationary pressures linked to rising global energy costs.
The decision by the central bank’s Monetary Policy Committee (MPC) came in an 8–1 vote, with external member and chief economist Huw Pill the lone dissenter, voting for a rate hike to 4%. The rate decision was announced following the committee’s latest policy meeting at noon.
The MPC, tasked with maintaining inflation at its 2% target, has already cut rates six times since mid-2024 and was widely expected to continue easing this year. However, the recent escalation in the Iran conflict has complicated the outlook.
A surge in energy prices, partly driven by disruptions around the Strait of Hormuz, is beginning to feed into global inflation, prompting policymakers to pause further rate cuts as they assess the evolving risks.
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