Interest rates hold expected but Bank of England facing tough choices
The Bank of England has maintained interest rates at 3.75% despite rising inflation, citing global energy supply disruptions caused by the Middle East conflict. The Bank also announced a shift in its quantitative tightening strategy, moving to a slower, eight-year bond sell-off plan.
Why it matters
This decision highlights the ongoing struggle of central banks to balance inflation control with economic stability amid geopolitical volatility.
Image source, Getty Images By Dearbail Jordan Business reporter Published 17 September 2026, 00:15 BST Updated 8 minutes ago The Bank of England has held interest rates for the sixth time in a row but said they are likely to rise if high energy prices caused by the conflict in the Middle East continue.
The main Bank rate has been kept at 3.75% despite an increase in the pace of inflation.
The US-Israel war with Iran has disrupted global energy supplies which has led to a sharp increase in petrol and diesel prices.
The Bank now forecasts that inflation will rise more than it previously thought and warned that the price cap on household gas and electricity bills for January is "now expected to rise substantially further".
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in