The Bank of England has left its key interest rate unchanged at 3.75%, keeping borrowing costs steady as a sustained jump in global energy prices threatens to push inflation back up later this year.
The decision was taken at the Monetary Policy Committee (MPC) meeting that ended on 29 July 2026 and published the following day. It leaves Bank Rate at the level it first reached in December 2025 — but the vote was far from unanimous, and the split points to a Committee growing uneasy about what comes next.
The key numbers at a glance
| Bank Rate | 3.75% (unchanged) |
| MPC vote | 6–3 in favour of holding |
| CPI inflation (June 2026) | 2.6% |
| Inflation target | 2% |
| Brent crude (28 July close) | $84 a barrel |
| UK natural gas (28 July close) | 136 pence a therm |
| Next decision | Thursday 17 September 2026 |
A 6–3 split, with three votes for a rise
Six members voted to keep Bank Rate at 3.75%: Governor Andrew Bailey, Sarah Breeden, Swati Dhingra, Clare Lombardelli, Dave Ramsden and Alan Taylor.
Three voted against — Megan Greene, Catherine L Mann and Huw Pill — each preferring an immediate quarter-point increase to 4%.
The minority argued that moving early would reduce the probability of so-called second-round effects, where a one-off jump in energy costs feeds through into wider price and wage setting and becomes self-sustaining. In their view, setting policy as though those effects were stronger and correcting course later would prove less costly than doing the reverse. They also argued that a rise now would cut through the noise in commodity and asset prices and send an unambiguous signal about the Bank’s willingness to tackle upside risks to inflation.
Why energy prices are driving the decision
The dominant source of uncertainty, the Committee said, remains the conflict in the Middle East and its effect on energy markets. The disruption to the transport and supply of oil and gas has raised prices and pushed up both motor fuel costs and household utility bills.
As at the close of business on 28 July, the Brent crude front-month future stood at $84 a barrel and the UK front-month natural gas future at 136 pence a therm — both materially higher than before the conflict began. In June’s CPI reading, motor fuel prices alone contributed 0.6 percentage points. For background on how crude markets are priced and what moves them, see our explainer on what crude oil is and how it is priced.
Inflation has fallen — but the Bank expects it to climb again
CPI inflation has fallen to 2.6%, further than the Bank had expected. That is still above the 2% target, and policymakers expect it to rise later in the year as higher energy costs continue to pass through the economy.
The Committee said there is little evidence so far of material second-round effects, and that recent data has shown clear signs of underlying disinflation. A loose labour market — with more people looking for work than there are jobs available — should also limit how much employers raise pay, helping contain the wider inflationary impact.
Today, we’ve held Bank Rate at 3.75%. Inflation has fallen faster than we’d expected, but the conflict in the Middle East continues to mean high and volatile energy prices. That will cause inflation to rise again later this year. However the conflict unfolds, our job is to make sure any increase in inflation is temporary and that it comes back to our 2% target.Andrew Bailey, Governor of the Bank of England
What it means for mortgages and borrowing
Bank Rate is the interest rate the Bank of England pays commercial banks, and it feeds through to what lenders charge customers. Tracker and most standard variable rate mortgages move with it directly, so a hold means no automatic change for those borrowers this month. Fixed-rate deals are priced off market expectations for where rates are heading rather than today’s level, which is why they can move even when Bank Rate does not.
The Committee noted that mortgage rates for households and borrowing costs for firms are already higher than they were before the conflict, and that this is making people more cautious about spending — one of the forces expected to pull inflation back down over time. Anyone weighing short-term secured borrowing may find our guide to bridging loan interest rates in the UK a useful comparison point.
What it means for savers
Savings rates broadly track Bank Rate, so a hold means the recent easing in returns is likely to pause rather than reverse. With inflation at 2.6%, any account paying less than that is still losing purchasing power in real terms, which makes shopping around more valuable than usual. Our guide on how to save more money with smart financial choices covers how to structure savings when rates are moving.
What happens next
The Committee judged that the risks to the inflation outlook are tilted to the upside relative to its central projection in the July Monetary Policy Report, while stressing that the picture could still change materially as events in the Middle East unfold. It said it stands ready to act as necessary to keep CPI inflation on track to meet the 2% target in the medium term.
The next announcement is due on Thursday 17 September 2026. With three members already voting for a rise, that meeting is likely to turn on whether energy prices have stabilised and whether any evidence of second-round effects has begun to appear in the data.
Frequently asked questions
What is the current Bank of England base rate?
Bank Rate is 3.75%. It was held at that level at the MPC meeting ending 29 July 2026, having been reduced from 5.25% in August 2024 down to 3.75% by December 2025.
Why did the Bank not cut rates again?
Inflation is still above the 2% target at 2.6%, and the Bank expects it to rise later this year as higher energy costs pass through. Policymakers judged that current rates are at about the right level to bring inflation back to target in the medium term.
Who voted for an interest rate rise?
Megan Greene, Catherine L Mann and Huw Pill voted to increase Bank Rate by 0.25 percentage points to 4%. They were outvoted 6–3.
When is the next interest rate decision?
Thursday 17 September 2026.
Will my mortgage payments change?
If you are on a fixed-rate deal, nothing changes until your fix ends. If you are on a tracker or standard variable rate, a hold means no automatic change from this decision, though lenders can still adjust their own variable rates independently.