The Bank of England (BoE) has held the base rate once again at 3.75%, as the Monetary Policy Committee (MPC) voted six to three in favour of holding interest rates.

The central bank lowered the base rate from 4% to 3.75% in December 2025, and it has remained unchanged since.

The MPC voted in favour of holding the rate, with three members voting to increase it by 0.25% to 4%.

The latest update comes as the Office for National Statistics announces that UK inflation rose from 2.9% in July to 3.1% in August.

The committee said protracted conflict in the Middle East has contributed to further increases in oil and energy prices since the previous meeting at the end of July.

The BoE added that inflation is also expected to rise further over the coming quarters, and that its monetary policy is set to ensure inflation comes down to 2% sustainably.

Sales and marketing director at Phoebus Software, Richard Pike, said the decision to hold the base rate was "widely expected", despite inflation remaining above the 2% target.

He added: "However, the path beyond this meeting is becoming much harder to read. The sharp rise in oil prices over recent weeks is another potential source of upward pressure as we head into autumn.

"The question for the Bank will be whether those external pressures become embedded in the wider inflation picture. There are some encouraging signs domestically, with wage growth and services inflation easing, but if higher energy and fuel costs begin feeding through into other prices, the MPC may have to keep rates higher for longer than was expected earlier in the summer.

"The mortgage market has already started pricing this in and the future direction of rates will depend on how the Bank assesses the balance between cooling domestic pressures and a much more uncertain inflation outlook."

Chief savings officer at Nottingham Building Society, Harriet Guevara, has warned that the markets are expecting further increases to the base rate in the coming months.

She concluded: "The impact of October's Budget will also give the Bank of England food for thought. While future rises might present a glimmer of an opportunity for savers searching for higher interest rates, it would spell more pain for borrowers.

"With so many volatile and unpredictable factors impacting rate decisions, it's almost impossible to time things just right, so I would urge households to focus on what's best for them now, in the medium term and in the longer term."

The MPC will convene again on 4 November for the next base rate decision, announcing its decision the following day.

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