BoE holds at 3.75%. Hike votes rise to "3".

At its meeting on 30 July, the Bank of England's Monetary Policy Committee (MPC) held the policy rate (Bank Rate) at 3.75% (a 5th consecutive hold). The vote was 6–3. What stands out is the nature of the dissent. The three who dissented (Megan Greene, Huw Pill and Catherine Mann) did not call for a cut but dissented in favour of a 0.25% hike. From two dissents in June, the "hawks" pushing for a hike have grown further.

This is what is known as a "hawkish hold." Governor Bailey explained the decision by saying that "the global backdrop looks more uncertain and inflationary" (US–Iran tensions and the like), while "the domestic price environment is more benign." The Bank is striking a balance between upside risks from abroad and calmer conditions at home. With energy prices swinging widely, it is watching carefully.

Against post-pandemic inflation, the BoE hiked 14 times in a row from late 2021. Bank Rate reached a peak of 5.25% in August 2023. As inflation cooled, it began cutting in August 2024, reaching 3.75% by December 2025. Since then it has been on hold for four straight meetings, pausing partway down the slope.

The easing cycle paused after six cuts (1.5% in total). Markets once expected further cuts during 2026, but amid the risk of resurgent inflation and a hawkish split in the vote, they have shifted toward pricing in a hike instead. It is a tricky juncture, with "up or down next" hard to read.

The latest CPI (consumer prices) has cooled to +2.8% year on year. It is edging toward the 2% target, but the BoE warns it will "rise again later in the year", as higher energy prices tied to Middle East tensions feed through with a lag. Services CPI, which reflects wages, remains sticky at +3.2%, leaving a risk that inflation does not return all the way to target.

Although inflation is calming for now, the BoE is wary of upside risks ahead. Energy prices have fallen since the previous meeting but remain high and volatile. In the labour market, the unemployment rate has risen to 5.0%, showing signs of a slowing economy. Caught in a tug-of-war between the risk of a rebound in inflation and economic weakness, the Committee is holding to watch and wait, yet the calls for a hike cannot be ignored — a difficult stretch continues.

Among major central banks, the BoE is pursuing an aggressive quantitative tightening (QT). Rather than merely waiting for bonds to mature, it stands out for actively selling its holdings of UK government bonds (gilts) in the market. Over the year from October 2025, it plans to reduce holdings by £70 billion.

With dissents calling for a hike having risen, markets are alert to upward pressure on UK gilt yields. The looser supply-demand balance from QT is another factor lifting long-term rates. Holding the rate steady while continuing to tighten on the balance sheet — that combined effect is being felt in markets.

Monetary policy is set by a one-person-one-vote majority of the nine members of the Monetary Policy Committee (MPC). It comprises 5 members from within the BoE (the Governor, Deputy Governors and others) and 4 external members appointed from outside. Unlike the Fed or the ECB, a big distinguishing feature is that each member's vote is published as part of the tally.

Because of this transparency, the split itself becomes a powerful message. Follow the run of votes — March 9–0 → April 8–1 → June 7–2 → July 6–3 — and the "hawks" calling for a hike have grown by one each time. Dissents reaching three reflects the Committee's rising vigilance on inflation. With just one or two more votes able to flip the majority, markets have begun to reckon with the possibility of hikes resuming. The minutes are published at the same time, letting readers see the substance of the debate.

The MPC meets eight times a year. At the February, May, August and November meetings, it publishes a Monetary Policy Report (MPR) setting out detailed economic projections. This decision came on 30 July. The next is on 17 September.

Decisions are published at noon UK time, together with the minutes. At the next meeting on 17 September, attention will focus on how the Committee weighs the conflicting forces of upside inflation risk from abroad and calming domestic prices. Should dissents rise further, a hike becomes all the more real.

Sterling is one of the major currencies, and BoE rates move the pound's exchange rate. After the hawkish hold, the pound held firm against the dollar and the euro. UK rates are the second-highest among major economies, behind the US, drawing in yield-seeking money while also weighing on borrowers through mortgage costs and the like.