Overview
- At the Monetary Policy Committee’s June 18 meeting members voted 7–2 to hold the Bank Rate at 3.75 percent, keeping borrowing costs unchanged since March.
- Speaking at the ECB conference on July 1–2, Governor Andrew Bailey said cutting rates was “off the table at the moment” and that he has not backed a hike because the UK economy and labour market are softening.
- Geopolitical tensions in the Gulf pushed oil and gas prices higher and more volatile, and although Brent has fallen back below $71 a barrel it remains above pre‑conflict levels while Ofgem’s higher energy price cap took effect on July 1.
- Consumer price inflation was 2.8 percent in May and the Bank warns it could rise toward about 4 percent later this year if higher energy costs feed through to food and other prices.
- Markets now price a sustained hold for the rest of 2026 and the MPC — split after two members backed a June hike — will re‑assess incoming data at its July 30 meeting as households already face roughly a one percentage‑point rise in mortgage costs since March.