The Bank of England’s Monetary Policy Committee voted to hold the Bank Rate at 3.75% on June 18, keeping borrowing costs unchanged as declining global oil prices provided a welcome counterweight to persistent inflationary pressures.
The decision wasn’t unanimous. Seven members voted to maintain the current rate, while two pushed for a hike to 4%.
The inflation picture
UK Consumer Price Index inflation stood at 2.8% in May 2026. That’s above the BoE’s 2% target, but not alarmingly so. The committee expects inflation could tick higher in coming months as recent energy price swings work their way through the economy.
Oil prices have come down meaningfully since their peak above $120 per barrel, a spike driven by the escalation of the Middle East conflict around late February 2026. Energy costs remain elevated compared to pre-conflict levels. The BoE is watching closely for second-round effects on wages and prices.
