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Bank of England holds 3.75% while energy inflation is still in the room
The MPC voted 6–3 to keep Bank Rate at 3.75% as UK CPI sits at 3.1% and energy prices remain volatile. Against a hawkish Fed, sterling had a quieter week — and a wider dollar spread.
6 min read · 17 September 2026
The vote
At the meeting ending 16 September, six members held Bank Rate at 3.75%. Three voted to hike 25 bp to 4.00%. That is a more hawkish split than June’s 7–2 hold. The Committee also voted unanimously to run the stock of QE gilts to zero. Next decision: 5 November.
Why they waited
UK CPI is 3.1% and the Bank says it will rise further as higher crude and refined products feed through. The Middle East conflict is named in the summary. So far, the majority sees limited knock-on into wages and broader prices. The hawkish three argue the risk of persistence grows the longer energy stays high. Bailey’s camp is still wait-and-see.
Sterling versus the Fed
A hold against a Fed hike is not a sterling rally. GBP/USD was little changed on the decision itself, then gave ground as the dollar index pushed through 100. GBP/JPY still rose on the yen’s worse week. The pair that paid was the dollar, not the pound. Cable traders are watching oil, the next UK CPI, and whether November’s 6–3 becomes a hike.
What the desk watches next
Energy and wages, in that order. If motor fuel and utilities keep lifting CPI without a labour response, the hold can last. If second-round effects show up, the three dissenters become the template. Do not mix a BoE hold with a USD short — those are two ideas.
Risk note
A 6–3 hold can reprice in one print. Size from invalidation, not from the vote count. This is desk colour, not a sterling recommendation.
These notes are education, not a recommendation to trade, and not a solicitation. Leveraged FX can return a total loss of capital, quickly. Nothing here is personal advice. SummitFx does not hold client funds. Read the risk disclosure.