The Bank of England has held Bank Rate at 3.75% but warned that inflation is likely to rise further as higher energy prices feed through the economy.

The Monetary Policy Committee voted 6–3 to maintain the rate at its September 2026 meeting, with three members preferring a 0.25 percentage point increase to 4%. CPI inflation reached 3.1% in August 2026, while the Bank expects it to rise to around 3.75% in the final quarter of 2026 and slightly above 4% in the first quarter of 2027.

Ryan Etchells, Chief Commercial Officer at property lender Together, said: “An interest rate increase remains likely before the end of the year, meaning that today’s decision will only lead to the same delayed outcome. And to add to the property market’s woes, many analysts are expecting further increases next year.”

The Bank said the outlook had become more uncertain following further increases in oil, gas and refined fuel prices. However, there is so far little evidence that higher energy costs are feeding into broader wage and price-setting.

For mortgage borrowers, the decision leaves Bank Rate unchanged but market rates have already risen. The Bank noted that quoted two-year fixed mortgage rates were around 95 basis points higher than before the conflict.

Jonathan Samuels, CEO of Octane Capital, said: “A cut would have been preferable for borrowers, but a hold at least avoids adding further pressure in the immediate term. The bigger question now is how persistent these inflationary pressures prove to be, because that will ultimately determine the direction of swap rates and, in turn, mortgage pricing over the coming months.”

The MPC’s next scheduled decision is on 5 November 2026.