The Bank of England's Monetary Policy Committee voted by 7–2 on 18 September 2025 to hold Bank Rate at 4.00%. Governor Andrew Bailey, Sarah Breeden, Megan Greene, Clare Lombardelli, Catherine L Mann, Huw Pill and Dave Ramsden voted to maintain the rate, while Swati Dhingra and Alan Taylor preferred a reduction of 0.25 percentage points to 3.75%.
The decision leaves Bank Rate 125 basis points below the 5.25% level at which the easing cycle began in August 2024, following five quarter-point cuts, the most recent in August 2025.
INFLATION OUTLOOK
Twelve-month CPI inflation was 3.8% in August. The Committee expected inflation to rise slightly in September, to a temporary peak of 4.0%, before falling back towards the 2% target, and said upside risks to medium-term inflationary pressures remained prominent.
The MPC said a gradual and careful approach to the further withdrawal of monetary policy restraint remained appropriate. It added that monetary policy was not on a pre-set path and that the Committee would remain responsive to the accumulation of evidence.
QUANTITATIVE TIGHTENING SLOWED
At the same meeting, the Committee voted 7–2 to reduce the stock of UK government bonds held for monetary policy purposes by £70 billion over the next 12 months, bringing the total to £488 billion. The previous annual reduction had been £100 billion. Two members dissented on the size of the reduction.
The MPC's next decision is due on 6 November 2025, when the minutes of its meeting ending on 5 November will be published.
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