The Bank of England’s Monetary Policy Committee voted to hold the Bank Rate at 3.75% on July 29, a decision that reflects the awkward middle ground central bankers find themselves in when inflation won’t cooperate but the economy isn’t exactly booming either.
The vote split 6-3, with three members pushing for a quarter-point hike to 4%.
The inflation picture
CPI inflation came in at 2.6% in June 2026. That’s above the Bank’s 2% target, and it’s been stubbornly sticky for reasons largely outside the MPC’s control.
The primary culprit is energy prices, which have been whipsawed by the ongoing conflict in the Middle East. When geopolitical risk gets priced into oil and gas markets, it flows downstream into everything from utility bills to transport costs to the price of groceries.
