- Lead. The Bank of England held Bank Rate at 3.75% on September 17, splitting 6-3 from the three MPC hawks who voted for an immediate rise to 4%, and deliberately diverging from the Federal Reserve’s unanimous hike the previous day.
- Fact. UK CPI reached 3.1% in August — a five-month high — while Brent crude has climbed 36% since July to around $106 a barrel, and UK wholesale gas prices are up 78% over the same period.
- Stake. The split vote and rising energy prices put the MPC on a knife-edge: the majority judged that second-round inflation effects have not yet materialised in wages or prices, but the three dissenters — Megan Greene, Catherine Mann and Huw Pill — argued the committee cannot wait.
The Bank of England’s Monetary Policy Committee voted by six to three on 17 September to maintain Bank Rate at 3.75%, Euronews reported. The decision came one day after the Federal Reserve raised its target range unanimously to 3.75%–4.00%, and three days after the European Central Bank lifted its deposit rate to 2.5%. The BoE’s hold makes it an outlier among major central banks at a moment when energy-driven inflation is strengthening the case for further tightening across most advanced economies.
The Split and What It Signals
The three dissenters — External Member Megan Greene, External Member Catherine Mann, and Chief Economist Huw Pill — voted for a 25-basis-point increase to 4.00%, the same configuration that appeared at the July 30 meeting. Their position rests on the argument that waiting risks allowing energy-price pressures to become embedded in wage and price-setting behaviour before the MPC can respond. The majority acknowledged that the risks to the inflation outlook are “tilted to the upside” but found “little evidence so far of material second-round effects,” justifying a hold while that assessment remains valid.
The vote pattern is significant not just for what it decided, but for the information it reveals about the MPC’s internal calculus. A 6-3 split on a hold, rather than a cut, means the committee is not moving toward easing; it is instead debating how quickly to tighten further. Markets are already pricing the probability of a November rise.
Energy Prices Are the Driver
The principal source of the MPC’s difficulty is the energy complex. Brent crude has risen roughly 36% since July, driven in large part by the US-Iran confrontation in the Strait of Hormuz and the associated disruptions to Gulf tanker flows. UK wholesale gas has moved even more sharply, up 78% over the same period. Inflation is expected to rise further in coming quarters as those energy costs feed through into household bills and transport. The Bank’s own projections are being revised upward as the pass-through accelerates.
The backdrop makes the BoE’s position uncomfortable. It is holding rates while the Fed has hiked unanimously and the ECB has tightened for the second consecutive meeting. Previews of the September decision had already flagged the hawk-dove tension within the committee. The November meeting, now carrying the weight of another CPI reading and a probable further rise in energy costs, is shaping up as the decisive moment for whether the MPC majority moves from hold to hike.