The Bank of England is likely to keep Bank Rate steady at 3.75% at its 17 September MPC meeting, the sixth consecutive pause expected in 2026 - this is because the consensus view is for a 6-3 vote at the September poll. However, with inflation running above the 2% target and energy prices rising, the risk of a tighter vote or even an unexpected 25bps rate increase remains.
Markets will be looking for the MPC's assessment of inflation, guidance on future rate increases and the pace of quantitative tightening. With UK inflation still above the BoE's 2% target and the risk of higher energy prices, policymakers may maintain a hawkish tone and keep a rate hike in November an option, buoying the pound and UK gilt yields and weighing on rate-sensitive equities.
