UK Interest Rates: Bank of England Holds Rate at 3.75% as Inflation Warning Intensifies
The Bank of England has kept UK interest rates unchanged at 3.75% on Thursday, September 17, 2026, in a closely watched decision released at midday as inflation pressures continue to build across Britain.
The Monetary Policy Committee voted 6-3 to keep Bank Rate at 3.75%, while three members supported an immediate quarter-point increase to 4%.
Bank of England Keeps Interest Rates at 3.75%
The decision means the UK base rate remains at 3.75% for the sixth consecutive meeting, keeping a key benchmark for mortgages, loans and savings unchanged for now.
The Bank faced renewed pressure after UK inflation climbed to 3.1% in August, above its 2% target.
UK Inflation Could Rise Above 4%
The Bank warned that inflation could climb above 4% in early 2027, significantly higher than previously expected, as elevated energy prices continue to feed through to households and businesses. (Governor Andrew Bailey indicated that a prolonged period of elevated energy costs could require tighter monetary policy.
That leaves the possibility of a future interest-rate increase firmly in focus even though policymakers chose not to raise rates today.
What the Decision Means for Mortgages and Borrowers
Tracker and other loans directly linked to Bank Rate should not receive an immediate increase from Thursday’s decision because the benchmark rate remains unchanged.
Fixed mortgage rates can still move independently, however, because lenders also respond to financial-market expectations and government bond yields.
For savers, the decision also means there is no immediate Bank Rate increase to push savings rates higher.
Bank of England Changes Bond Strategy
Alongside the interest-rate decision, the Bank also announced changes to the way it reduces its government bond holdings, including a longer-term plan to wind down the remaining portfolio through 2034.
The combination of rising inflation and unchanged interest rates puts the next Bank of England meetings under increased scrutiny as households, mortgage borrowers and financial markets watch for signs of when borrowing costs could change next.
