Bank of England holds rate at 3.75% in a 6–3 vote

The Bank of England’s Monetary Policy Committee voted 6–3 to keep Bank Rate at 3.75% at the meeting that ended on 16 September. Three members preferred a 0.25-percentage-point increase to 4%.

The bank reported August consumer-price inflation at 3.1% and said the prolonged conflict in the Middle East had pushed up crude and refined energy prices. It estimated that direct energy effects, mostly motor fuels, accounted for about 0.7 percentage points of the 1.1-point gap between inflation and the 2% target.

Services inflation was 3.4% in August, down from 4.5% in March. The committee said there was little evidence so far of significant second-round effects in price and wage setting, but that the risk could grow if higher energy prices persisted. It said the policy stance would depend on the shock’s scale, duration and transmission through the economy.