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The Bank of England’s Monetary Policy Committee (MPC) voted 6–3 to keep Bank Rate at 3.75% at its September 2026 meeting, according to Deputy Governor Dave Ramsden. Ramsden said a decision to hold can itself be an “active response” to inflation risks: the committee can leave rates unchanged while weighing whether price pressures will persist and waiting for more evidence. That is Ramsden’s explanation and reflects his own vote with the majority; it should not be read as an official phrase adopted collectively by the MPC.
What happened at the September meeting?
Ramsden reported that the MPC voted 6–3 to maintain Bank Rate at 3.75% in September 2026. In his speech, he explained his view: “For my part, Bank Rate being the ‘active’ tool doesn’t always mean it has to change. Indeed, a decision to hold can be an active response to the risks to the inflation outlook.” Read Ramsden’s September speech.
The wording matters. Ramsden was describing why he supported the September hold, not announcing a new collective MPC doctrine. A rate decision is active because the committee chooses a setting in light of its inflation objective and the risks facing the economy. Leaving the rate unchanged is still a decision; it is not evidence that policymakers took no action.
Why might holding rates help address inflation risks?
Bank Rate affects borrowing costs and demand across the economy, but it cannot make global energy prices fall. The MPC’s task, as set out in its July summary, is to set policy so the economy adjusts to shocks while inflation returns to the 2% target sustainably. That means looking at whether an energy-price shock is spreading into domestic wages and prices, rather than trying to control the original energy-price move itself. See the July 2026 summary and minutes.
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A hold can therefore preserve restraint already in place while the committee assesses how a shock is passing through the economy. If the inflation risks look persistent, keeping rates elevated may help prevent temporary price increases from becoming embedded in wage and price setting. If underlying inflation is easing, an immediate increase could add unnecessary restraint. The balance depends on evidence, not on an automatic rule that every inflation risk requires a rate rise.
What was the detailed rationale in July?
The latest detailed rationale in the material available here is from the July 2026 meeting, not September. The July MPC also voted 6–3 to hold Bank Rate at 3.75%; three members preferred a 0.25 percentage-point increase to 4%. Its summary and minutes set out the competing risks as follows:
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- Energy prices and inflation risks: Energy prices remained volatile and above their pre-conflict level following the Middle East conflict, making its UK economic impact uncertain. The July summary said CPI inflation had fallen to 2.6% since the prior meeting, but was expected to rise later in 2026 as higher energy costs passed through.
- Potential second-round effects: The longer elevated energy prices persisted, the greater the risk that they would feed into wage and price setting. The summary said there was little evidence of those effects so far.
- Disinflation and existing restraint: Policymakers also saw continued signs of underlying disinflation. The members who supported holding judged that the hold, together with the tightening in financial conditions since the conflict began, provided sufficient insurance against energy-related upside risks while they gathered more evidence.
- Option to respond: The hold group retained the option to change Bank Rate if the evidence warranted it, and recognised that additional restraint might be needed if material second-round effects emerged.
These are July figures and assessments; 2.6% is not a September inflation reading. The September speech confirms the vote split and Ramsden’s own reasoning, but does not provide a complete account of every September member’s arguments.
Why did some members prefer a rate rise?
The July dissenters preferred a 0.25 percentage-point rise, taking Bank Rate to 4%. That position put more weight on the possibility that elevated energy costs would create persistent domestic inflation, including through second-round effects. The hold group placed more weight on the limited evidence of those effects at that point, signs of underlying disinflation, and the restraint already coming through financial conditions.
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This was a disagreement about the balance of risks and the timing of action, not about whether inflation mattered. A pre-emptive increase might provide more protection if price pressures proved persistent; waiting could avoid tightening more than necessary if disinflation continued. The July minutes document this split, but they should not be used to attribute those detailed arguments to September’s dissenters.
Does a hold mean rates will stay at 3.75%?
No. The July report said future decisions would depend on evolving evidence, the inflation outlook and its risks, including whether higher energy prices generated strong inflationary pressure as they passed through the economy. A hold does not commit the MPC to keep rates unchanged or establish a particular path for future decisions. The committee can raise or cut Bank Rate if the outlook changes enough to warrant it. Read the July 2026 Monetary Policy Report.
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How does Ramsden’s earlier view fit in?
Ramsden said that before the Middle East conflict he had voted in February for a cut to 3.5%. He also said that, had the disinflation evidence remained on track, he would have expected at least two cuts by the time of his September speech. This was his personal counterfactual assessment, not a collective MPC forecast. It helps explain why he viewed the later inflation risks as relevant to the choice to hold: the policy decision had to be reconsidered as the outlook changed.
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