Key Takeaways
- The Bank of England is expected to hold UK interest rates steady on Thursday.
- Policymakers will be closely watching inflation data for August, which is due a day earlier.
- The BoE’s latest meeting follows decisions from the European Central Bank and Federal Reserve.
The Bank of England is expected to hold interest rates for a sixth time in 2026 when it meets this week, but expectations are growing that the UK central bank will raise them by the end of the year.
The decision, due on Thursday, comes amid concern about countries’ ability to contain inflation in the wake of conflict in Iran, a global bond market selloff, and domestic political uncertainty surrounding the upcoming budget.
The Bank of England’s meeting comes amid a busy schedule of macroeconomic events: a day after the US Federal Reserve’s rate decision, and a week after the European Central Bank raised rates. UK inflation data is also due the day before the central bank’s meeting.
Whether the BoE hikes rates or not, lenders have already started to raise mortgage costs for consumers in anticipation of rate hikes in coming months. Swaps data has the BoE raising rates in November, December—although that is still a close call—and in February 2027.
Rising UK Inflation Puts Pressure on the BoE
Having brought inflation back to its 2% target in May 2024, the Bank of England has faced several setbacks in containing price rises, including the global disruption caused by tariffs and in 2026 an energy price shock caused by the conflict in Iran.
In recent months, the BoE has pursued a “wait-and-see” approach to global crises to examine the effect of global and domestic events on the UK economy. The Consumer Prices Index currently sits at 2.9% for July, up from 2.7% in June.
One factor influencing the Bank of England’s decision will be the latest CPI data from the Office for National Statistics, covering the 12 months through August 2026. That will be released on Sept. 16, and the MPC will have sight of it as it deliberates. FactSet consensus has inflation rising to 3.2% and core inflation increasing to 2.7%.
At the MPC’s last meeting in July, three members were in favor of a hike to 4%, an increase from two in June: economists Megan Greene and Catherine Mann, and chief economist Huw Pill. In a September speech in Scotland, Pill reiterated his opposition to the “wait-and-see” approach and urged a rate rise to 4%.
“These uncertainties may not resolve themselves as quickly or definitively as we would hope, leading to a status quo bias in the setting of bank rate,” he said. “In turn, such a bias could lead monetary policy to fall ‘behind-the-curve’ in addressing emerging inflationary risks.”
When Are the Next Bank of England Interest Rate Decisions?
- Sept. 17, 2026
- Nov. 5, 2026
- Dec. 17, 2026
- Feb. 4, 2027
- March 18, 2027
- Apr. 29, 2027
Another factor influencing events is the UK government’s upcoming Autumn Budget on Oct. 28, which will be Andy Burnham’s first as prime minister. Widely thought to include difficult decisions around tax, spending, and the UK’s crucial fiscal rules, it’s possible the Bank of England will prefer to wait to see the Treasury’s policy documents before increasing rates.
With no Bank of England meeting in October, November will be the first time the BoE will be able to react to the new fiscal regime.
