The Bank of England has voted to leave interest rates unchanged at 3.75%, with policymakers citing ongoing uncertainty over inflation and the impact of higher energy prices following recent tensions in the Middle East.

At its June 2026 meeting, the Monetary Policy Committee voted by a majority of 7-2 to keep Bank Rate on hold, with two members favouring a quarter-point increase to 4%.

The decision comes as CPI inflation has fallen to 2.8%, although the Bank expects inflation to rise again later this year as higher energy costs feed through into the economy. Policymakers said the labour market continues to loosen, while higher borrowing costs are helping to ease inflationary pressures.

Global energy prices have fallen since the Bank's previous meeting but remain above pre-conflict levels and continue to be volatile, leaving the outlook for inflation and economic growth uncertain.

In its statement, the Monetary Policy Committee said: “The impact of the energy shock on the UK economy remains uncertain. Monetary policy cannot influence energy prices but is being set to ensure that the economic adjustment to them occurs in a way that achieves the 2% inflation target sustainably.

“The Committee stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term.”

The decision means mortgage rates are unlikely to see any immediate relief, with households and businesses continuing to face borrowing costs that remain higher than before the recent escalation in geopolitical tensions.

The Bank stated it will continue to monitor developments in the Middle East and their impact on the UK economy closely.