The BOE held at 3.75%. Hike votes rose to "2."

The Bank of England's (BOE) Monetary Policy Committee (MPC), at its June 18 meeting, held the policy rate (the Bank Rate) at 3.75%. The vote was 7-2. What is notable is the nature of the dissent. The two dissenters (Deputy Governor Pill and member Greene) called not for a cut but for a 0.25% hike. Up from a single dissent at the previous meeting in April, the "hawks" calling for a hike have grown.

This is known as a "hawkish hold." Energy prices fell after the previous meeting, but they remain high and volatile. The BOE kept its guard up, saying "CPI could rise further later in the year, and policy needs to guard against the risk of second-round effects on wages and prices." From the unanimous vote (9-0) at the March meeting, the committee has steadily taken on a more hawkish tilt.

Against post-COVID inflation, the BOE hiked 14 times in a row from late 2021. The Bank Rate reached a peak of 5.25% in August 2023. It then pivoted to cuts from August 2024 as inflation slowed, reaching 3.75% in December 2025. Since then it has held for four meetings in a row, pausing partway down the descent.

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 the hawkish split in the vote, they have instead shifted to pricing in a hike. It is a tricky phase where "up or down next" is hard to read.

The latest CPI (consumer prices) has slowed to +2.8% year-on-year. It is moving closer to the 2% target, but the BOE warns it will "rise again later in the year." That is because higher energy prices tied to Middle East tensions pass through with a lag. Services CPI, which reflects wages, also remains sticky at +3.2%, leaving the risk that inflation does not return fully to target.

Although prices are settling down for now, the BOE is wary of upside risk ahead. Energy prices may have fallen since the previous meeting, but they remain high and volatile. In the labour market, the unemployment rate has risen to 5.0%, with signs of slowing growth too. Amid the tug-of-war between the risk of resurgent inflation and economic weakness, the committee is holding to watch and wait, yet it cannot ignore the calls for a hike - a difficult phase continues.

Even among major central banks, the BOE is pursuing aggressive quantitative tightening (QT). What sets it apart is that, rather than simply waiting for maturity, it is actively selling the UK government bonds (gilts) it holds into the market. It plans to cut its holdings by £70bn over the year from October 2025.

With dissenting votes for a hike rising to two, markets are mindful of upward pressure on UK government bond (gilt) yields. The slack in supply-demand from QT is one factor pushing long-term rates up. Holding rates steady while continuing to tighten on the balance-sheet side - that combined effect is being felt in markets.

Monetary policy is decided by a one-person-one-vote majority of the nine members of the Monetary Policy Committee (MPC). It comprises five from inside the BOE, including the Governor and Deputy Governors, and four external members appointed from outside. Unlike the Fed or ECB, a big distinguishing feature is that each member's vote is published as the vote count.

Because of this transparency, a split vote itself becomes a powerful message. Following the flow of the vote - 9-0 (unanimous) in March, 8-1 in April, 7-2 in June - the "hawks" calling for a hike have grown step by step. This time the rise to two "dissent = hike" votes mirrors the committee's heightened inflation vigilance and reinforces the market's hawkish read. The minutes are published at the same time, so the substance of the debate can be read too.

The MPC meets eight times a year. At the February, May, August and November meetings, a Monetary Policy Report (MPR) with a detailed economic outlook is published. This decision was on June 18. The next is July 30 (MPR published).

Decisions are published at noon UK time alongside the minutes. At the next meeting on July 30, a fresh economic outlook will be presented together with the Monetary Policy Report (MPR). The focus is how the committee judges the conflicting signals: the slower CPI, the upside risk from energy prices, and the rising unemployment rate.

The pound is one of the major currencies, and BOE rates move the sterling 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 after the US, drawing in yield-seeking funds while also weighing on borrowers via mortgages and the like.