The Bank of England kept interest rates on hold at 3.75% at its first meeting of 2026 on Thursday.
The central bank’s nine-member Monetary Policy Committee (MPC) voted by a narrow 5-4 margin to keep rates on hold. Four members voted to reduce the benchmark interest rate, known as “Bank Rate,” by 25 basis points. Economists polled by Reuters had expected the vote to be a clearer cut 7-2 split.
The BOE’s policymakers last voted narrowly to cut interest rates in December, but economists had expected the central bank to hold rates steady in February, given better-than-expected monthly growth figures and persistent inflation (at 3.4% in December), in the latest data.
The BOE said that monetary policy is being set to ensure that the inflation rate “not only reaches 2% but remains sustainably at that level in the medium term, which involves balancing the risks around achieving this.”
“On the basis of the current evidence, Bank Rate is likely to be reduced further,” but it said judgments around further policy easing will become a closer call.
