The Bank of England maintains interest rates at 3.75% and warns that further rate hikes may be necessary.

The Bank of England has kept its interest rate unchanged at 3.75%, in line with market expectations, while warning that further rate hikes may be necessary if escalating Middle East conflicts lead to increased inflationary pressures. Six rate-setters, including Governor Bailey, voted in favor of keeping the rate unchanged. The stance of the Monetary Policy Committee is largely consistent with its July meeting. In his speech, Bailey stated that so far, the global energy shock has had a limited impact on UK prices and wages. However, he added, "The longer this volatility lasts, the greater the impact on inflation, and the higher the likelihood we will need to raise the bank rate." Alongside the rate decision, the Bank announced it would abandon its plan to sell long-term government bonds and said it aims to complete the write-down of its £488 billion debt portfolio by September 2034.