Bank of England expected to hold rates as UK inflation rises

9/17/2026

Bank of England rate decision: why 3.75% is likely to hold despite hotter UK inflation See what markets expect next and how it could affect borrowing, bonds, and the pound

The Bank of England is widely expected to keep its benchmark interest rate at 3.75% at Thursday's meeting, even as inflation in the United Kingdom has moved further above the central bank's 2% target. Markets are pricing in more than an 80% chance of no change, according to LSEG data. A rate increase is more commonly expected later in the year, with November seen as a possible next step. The decision would come as other major central banks move in different directions. The U.S. Federal Reserve raised rates by 25 basis points on Wednesday, while the European Central Bank also recently tightened policy. In Japan, policymakers are expected to consider another increase this week. UK inflation rose to 3.1% in August, its first reading above 3% since March. The Office for National Statistics said higher motor fuel prices were a major factor, and analysts noted that energy costs and broader fiscal concerns continue to weigh on the British economy and government bond markets.