Bank of England holds interest rates at 3.75%, but governor says high energy costs may lead to increase

The Bank of England has kept interest rates at 3.75% as expected with a split of 6-3 to hold.

The Bank’s nine-member Monetary Policy Committee, on balance, has not seen the recent rise in energy prices pass through into wider inflationary pressures.

In a surprise move, the Bank of England has paused auctions of its remaining stock of £488 billion in government debt.

The Bank has put in place a long term plan to wind down the stockpile, built up during the financial crisis and Covid pandemic.

It has announced three notable moves. First, £222bn long term debt held by the Bank will now be kept until it expires.

Second, £120bn of this will be kept permanently to back the Bank’s issuance of banknotes.