{"id":508877,"date":"2026-06-20T01:45:33","date_gmt":"2026-06-20T01:45:33","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/508877\/"},"modified":"2026-06-20T01:45:33","modified_gmt":"2026-06-20T01:45:33","slug":"bank-of-england-keeps-uk-interest-rates-on-hold","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/508877\/","title":{"rendered":"Bank of England keeps UK interest rates on hold"},"content":{"rendered":"

The Bank of England kept interest rates on hold at 3.75% today, as it has since the start of the US-Iran war, judging it would be premature to raise rates now given the unclear strength of increased inflation pressures.<\/p>\n

The central bank’s Monetary Policy Committee voted 7-2 to keep rates on hold, in line with economists’ expectations in a Reuters poll, after external member Megan Greene joined Chief Economist Huw Pill in calling for a quarter-point rate rise.<\/p>\n

But most other MPC members appeared little closer to raising rates, broadly sticking with what Governor Andrew Bailey has called an “active hold” which he views as an effective tightening compared with market expectations of cuts before the conflict.<\/p>\n

The Bank of England’s approach contrasts with those of the European Central Bank<\/a> and Bank of Japan<\/a> – which have both raised rates in the past week – and projections from the US Federal Reserve after its first meeting under its new chair, Kevin Warsh, which showed policymakers expected rates to rise later this year.<\/p>\n

In the run-up to the Bank of England’s June meeting, a tentative truce between the US and Iran promises to reopen the Strait of Hormuz and lower oil prices, a boon for Britain if the deal sticks as it relies heavily on imported natural gas.<\/p>\n

However, the Bank of England said it was too soon to declare the inflation threat over.<\/p>\n

“Whatever happens in the future, the higher energy prices of the past four months means there’s already some inflationary pressure in the pipeline,” Andrew Bailey said in a statement alongside today’s decision.<\/p>\n

The Bank of England expects inflation to rise above 3.25% in the final quarter of this year, up from 2.8% in May, though this is a smaller increase than the rise to 3.6%-3.7% which it projected in April under two of its three main scenarios.<\/p>\n

The central bank was also marginally more upbeat on growth, estimating the economy is expanding at an underlying rate of 0.2% a quarter, up from 0.1% in its last set of forecasts despite a small fall in output in April.<\/p>\n

\"Andew
\nBank of England chief Andrew Bailey<\/p>\n

Both Pill and Greene said a rate rise now was needed to rein in households’ expectations for future inflation, which are their highest since at least 2009 in a quarterly Bank of England survey, though are coming down on a more frequent monthly survey.<\/p>\n

Inflation has exceeded the Bank of England’s 2% target for most of the past five years due to a series of upward shocks since the Covid-19 pandemic, most notably Russia’s 2022 invasion of Ukraine that lifted British inflation above 11%.<\/p>\n

“A proactive hike now in Bank Rate should help anchor inflation expectations,” Greene said.<\/p>\n

The rising cost of living has been a key factor behind many Britons’ dissatisfaction with mainstream politicians.<\/p>\n

Prime Minister Keir Starmer’s popularity has plummeted since he won a sweeping election victory two years ago, and he faces a potential leadership challenge if Greater Manchester Mayor Andy Burnham wins a parliamentary seat in a by-election today.<\/p>\n

Catherine Mann was the policymaker who appeared closest to joining Pill and Greene to vote for a rate rise, as she judged inflation risks were more prominent than the other MPC members who voted to keep rates on hold.<\/p>\n

But in minutes of the decision she agreed there was time to wait as “a forceful Bank Rate decision can have a quick effect on inflation and inflation expectations”.<\/p>\n

Deputy Governor Clare Lombardelli said the risk of damaging second-round inflation effects was increasing as high energy prices continued but so far the evidence pointed to a standard pass-through of higher energy prices.<\/p>\n","protected":false},"excerpt":{"rendered":"The Bank of England kept interest rates on hold at 3.75% today, as it has since the start…\n","protected":false},"author":2,"featured_media":508878,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-508877","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/508877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=508877"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/508877\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/508878"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=508877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=508877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=508877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}