The Bank of England is signaling it would rather let prices run a little hot than risk pushing the UK into a recession. Governor Andrew Bailey has indicated that the central bank may tolerate inflation above its 2% target for a period, prioritizing economic stability over the kind of aggressive rate moves that could choke growth.
What the BoE actually decided
At the Monetary Policy Committee meeting on April 30, 2026, the BoE voted 8-1 to hold the Bank Rate steady at 3.75%. UK consumer price index inflation stood at 3.3% in March 2026, well above the bank’s 2% target. MPC projections suggest it could climb toward 3.5% or higher later this year if energy prices stay elevated.
The primary culprit, according to Bailey, is ongoing conflict in the Middle East, which continues to disrupt energy markets and inject uncertainty into global supply chains. Bailey stated the BoE has “time to assess” the financial impact before making policy adjustments.
Why Bailey is choosing patience over aggression
