US EditionBank of England Keeps UK Interest Rates on Hold
The Bank of England’s Monetary Policy Committee unanimously held rates at 3.75% but warned of potential hikes due to sustained inflation pressure from Middle East energy price shocks.
- On March 19, 2026, the Bank of England's Monetary Policy Committee voted 9-0 to keep Bank Rate at 3.75%, with Governor Andrew Bailey saying the Bank 'stands ready to act' if energy prices stay high.
- The Middle East conflict has driven an energy-price shock that the Bank said is likely to keep prices elevated, with analysts warning inflation could rise well above target.
- UK natural gas spiked by more than 20% and Brent crude oil rose about 8%, while staff forecasts now expect inflation near 3% in the second quarter and warn it could reach 3.5%.
- Markets reacted by repricing the likelihood of hikes, as investors bet on a 0.5 percentage point rise and two-year gilt yields jumped 0.3 points to 4.39%, with economists in a Reuters poll mostly expecting a 7-2 hold.
- The MPC said it expects more information by its next meeting in late April, with Taylor saying 'Given massive uncertainty around energy prices, I currently see a high bar to hiking.
14 Articles
14 Articles
Concerns rise over conflicts in Middle East, triggering fear of inflation in US and Europe
Central banks in US, Europe, and UK draw attention to inflation risks of Middle East conflicts, while prolonged uncertainty may increase the permanence of price hikes - Anadolu Ajansı
Some members of the monetary authority stated that the scenario might require interest rate hikes at some point.
Bank of England holds rates as Middle East energy shock raises risk of monetary tightening | Northamptonshire Chamber of Commerce
Emeritus Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm. Conflict in the Middle East ends immediate hope of interest rate cuts and threatens hikes. Bank of England acted too slowly in 2021-22 and will not want to repeat mistakes. High rates will hinder economic growth and damage an already weakening labour market. The Bank of England’s decision to keep interest rates unchanged at 3.75% reflects a growing sens…
Bank of England holds rates as Middle East energy shock raises risk of monetary tightening - Cambridgeshire Chamber of Commerce
The Bank of England’s decision to keep interest rates unchanged at 3.75% reflects a growing sense of caution within the Monetary Policy Committee. While inflationary pressures in the UK had been easing in recent months, the rapidly escalating crisis in the Middle East has introduced a new and potentially powerful inflationary risk. Oil and natural gas prices have risen significantly in global trading markets, reflecting concerns about possible d…
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