Bank of England holds interest rate at 3.75% as inflation worries rise

In short: The Bank of England kept its main interest rate at 3.75% in September 2026, but officials were split as inflation risks increased.

What happened

The Bank of England’s Monetary Policy Committee, the group that sets interest rates, voted to hold Bank Rate at 3.75% at its September 2026 meeting. Bank Rate is the benchmark interest rate that influences what people pay on many mortgages and loans, and what they can earn on some savings.

The decision was not unanimous. Six members voted to keep the rate where it is, while three members wanted to raise it by 0.25 percentage points to 4%.

The committee said the risk of higher inflation had increased compared with its July view. It pointed to the prolonged Middle East conflict and higher and more unstable energy prices as the biggest uncertainty. UK CPI inflation, a common measure of price rises in shops (like a national receipt that tracks how much prices change), rose to 3.1% in August, and the committee expected it to go up further in the coming quarters.

Why it matters

Interest rate decisions affect everyday costs. When rates stay high or rise, borrowing usually stays expensive, which can keep pressure on mortgage payments and business loans. The Bank is weighing this against inflation, which reduces what your money can buy, especially when essentials like energy become more costly.

Source: NYTimes

Source attribution: Bank of England September 2026 summary and minutes https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/september-2026 and published minutes .