Bank of England holds rates at 3.75% in split 5-4 vote

The Bank of England's Monetary Policy Committee voted 5-4 to maintain the Bank Rate at 3.75% at its meeting ending February 4, 2026. Four members voted to reduce the rate by 0.25 percentage points to 3.5%.

CPI inflation fell from 3.8% in September to 3.4% in December 2025, remaining above the 2% target. The central bank expects inflation to fall back to around the target from April, primarily due to energy price developments including measures from Budget 2025.

The committee noted that wage growth and services price inflation have continued to ease, though they remain above target-consistent levels. The unemployment rate has risen to just over 5%, and underlying GDP growth has remained below estimates of potential.

Five members, including Governor Andrew Bailey, voted to maintain the current rate. Bailey stated he sees "scope for some further easing of policy" but emphasized this "does not mean that I expect to cut Bank Rate at any particular meeting."

The four members voting for a rate cut judged that risks from inflation persistence have diminished materially and placed greater weight on risks from weaker demand. Sarah Breeden, one of the four, said monetary policy "should be eased a little faster than implied by the current market path."

The committee acknowledged that Bank Rate is likely to be reduced further based on current evidence, though judgements around future easing will become "a closer call." The extent and timing of further monetary policy easing will depend on inflation outlook developments.

The stock of UK government bonds held for monetary policy purposes stood at £531 billion as of February 4.

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