2026.03.1912:04:01UTC+00BoE Holds Rates at 3.75% as Inflation Risks Rise

In March 2026, the Bank of England’s Monetary Policy Committee (MPC) voted unanimously to maintain the Bank Rate at 3.75%. This decision comes amid a sharp increase in global energy and commodity prices driven by the conflict in the Middle East, which is adding significant pressure to household fuel and utility bills and raising costs for businesses.

Before this external shock, domestic price and wage dynamics had been showing clear signs of disinflation. The MPC is now closely watching the risk of second-round effects on wages and prices, which become more likely the longer elevated energy costs persist.

Recent data show that headline inflation stood at 0.1% in February, with medium-term inflationary pressures broadly unchanged. The rise in energy prices is expected to push CPI inflation to between 3% and 3.5% over the coming quarters. However, weaker economic activity resulting from higher costs may help to contain second-round effects.

The Committee will continue to monitor developments in the Middle East and conditions in global markets and stands ready to adjust monetary policy as necessary to maintain price stability and support sustainable economic growth.