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Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →The Bank of England’s Monetary Policy Committee (MPC) voted 6–3 to keep Bank Rate at 3.75% at its September 2026 meeting. Deputy Governor Dave Ramsden, who voted with the majority, explained that holding rates need not mean doing nothing: it can be an active choice to manage risks to the inflation outlook.
What the MPC decided in September 2026
In a speech published in September, Ramsden reported that the MPC had voted 6–3 to leave Bank Rate unchanged at 3.75%. His explanation was personal, not a formally stated collective MPC phrase: “For my part, Bank Rate being the ‘active’ tool doesn’t always mean it has to change. Indeed, a decision to hold can be an active response to the risks to the inflation outlook.” Read Ramsden’s September speech.
The distinction matters. The MPC’s decision was to hold; “active response” is Ramsden’s description of how he viewed that choice. The speech does not set out the complete arguments of all September committee members.
Why a hold can still be a policy choice
Bank Rate is the MPC’s main tool for influencing inflation over time, but leaving it unchanged does not mean the committee has stopped responding to events. A hold preserves the existing level of monetary restraint while policymakers assess whether the inflation outlook is changing enough to justify a different rate.
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In July, the MPC said monetary policy cannot directly change energy prices. Its purpose is to ensure that the economy’s adjustment to shocks brings inflation back to the 2% target sustainably. In practice, that means focusing on whether an energy-price shock feeds into domestic wages and prices, rather than trying to control the global price of energy. See the July 2026 summary and minutes.
What the July decision reveals about the trade-off
The July meeting also ended in a 6–3 vote to hold Bank Rate at 3.75%. Its published summary and minutes offer a detailed example of the competing considerations behind a hold, but they describe July, not September.
The case for holding while gathering evidence
In July, CPI inflation had fallen to 2.6% since the previous meeting, and the MPC noted continued signs of underlying disinflation. At the same time, energy prices remained volatile and above their pre-conflict level after the Middle East conflict. The committee expected inflation to rise later in 2026 as higher energy costs passed through.
The minutes record that members in the hold group viewed the existing Bank Rate, together with tighter financial conditions since the conflict began, as sufficient insurance against energy-related inflation risks while they waited for more evidence. They saw little evidence at that point of second-round effects in wage and price setting, though recognised that such effects could become more likely the longer energy prices remained high.
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Three members dissented in July, preferring a 0.25 percentage-point increase to 4%. That split reflects a different balance of risks: if higher energy costs were likely to become persistent domestic inflation through wages and prices, more restraint sooner could be warranted. The July minutes record this dissent; they should not be treated as a full account of the arguments in September.
What Ramsden said about the path he had expected
Ramsden also described how his own view had changed. Before the Middle East conflict, he had voted in February for a cut to 3.5%. He said that, if the disinflation evidence had remained on track, he would have expected at least two cuts by the time of his September speech. That is Ramsden’s counterfactual assessment, not a collective MPC forecast or commitment.
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What a hold does—and does not—signal
The July policy report said future decisions would depend on evolving evidence, the inflation outlook and the risks around it, including whether higher energy prices generated strong inflationary pressure as they passed through the economy. A hold therefore did not promise that rates would stay at 3.75%; the committee retained the option to change Bank Rate if the evidence warranted it.
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- A hold keeps the current rate in place while the committee assesses how risks are developing.
- A rate change remains possible if the evidence shifts the balance of risks, including signs of second-round inflation effects.
- The July inflation figure and detailed July rationale are not September readings or a complete record of September members’ reasoning.
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