Market Flux Event
Bank of England Holds Rate at 3.75% as Three MPC Members Push for Hike Amid Surging Inflation Forecast
Read this in the Market Flux appThe Bank of England kept its benchmark interest rate at 3.75% on September 17, with the Monetary Policy Committee voting 6-3 to hold. The decision matched market expectations, which had also anticipated a 6-3 split, but the three dissenting members voted for an immediate increase to 4%, signaling meaningful division within the committee over the pace of tightening.
The hold came alongside a significantly more hawkish inflation outlook. The Bank now forecasts inflation will exceed 4% in early 2027, a sharp revision from its prior peak projection of 3.2%. The majority chose to wait and assess the inflationary impact of energy-price shocks stemming from Middle East tensions before moving further. The Bank warned it stands ready to act if price pressures broaden into wages. Q3 GDP growth is now seen at 0.4%, up from a prior estimate of 0.1%.
The decision contrasts with the Federal Reserve raising rates the day before, putting the two central banks on divergent near-term paths. Mortgage and loan costs in the UK remain elevated as a result of the hold, with borrowers facing continued pressure until the committee moves again.
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Sources
- ETMarketsThe US Federal Reserve raised its benchmark rate by 25 basis points to 3.75–4% on September 16. Crypto investors now have to assess how much of the tightening is already reflected in prices and how much more could follow. The cost of getting that distinction wrong is buying into a recovery that depends on rate cuts the #Fed has little reason to deliver. #ETMarkets Read more here
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- FXStreetNews🚨 BREAKING 🚨 Bank of England keeps its policy rate at 3.75%
- WallstengineBOE 🇬🇧 HOLDS RATES AT 3.75%, AS EXPECTED Vote: 6-3 to hold, with 3 members backing a hike. BoE now sees inflation above 4% in early 2027 vs a prior 3.2% peak, while Q3 GDP growth is seen at 0.4% vs 0.1%.
- InvestingBank of England keeps interest rates on hold at 3.75%
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- MarketRebelsBANK OF ENGLAND SAYS MPC VOTE 6-3 TO HOLD RATES AT 3.75% (REUTERS POLL: 6-3 VOTE FOR 3.75%)
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- MarketsdayBank of England Holds Rate at 3.75% — September 17, 2026 🔹 The Monetary Policy Committee voted 6-3 to keep Bank Rate at 3.75%. 🔹 Three members wanted a hike to 4%. The majority waited to gauge energy-price shocks from Middle East tensions. 🔹 Inflation is forecast to exceed 4% early next year. 🔹 The hold contrasts with the Federal Reserve’s rate increase the day before. 🔹 Mortgage and loan costs stay elevated. The Bank said it is ready to act if price pressures spread into wages. #BankofEngland #BOE #Rates #Inflation #UK #Macro #MarketTrends
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