Inflation fell to 2.6%, yet the MPC became more hawkish. Here's why — and what the July decision could mean for borrowers and savers.
Published decision — 30 July 2026, 12:00 noon: At its meeting ending on 29 July 2026, the Monetary Policy Committee voted by a majority of 6–3 to maintain Bank Rate at 3.75%. Three members (Megan Greene, Catherine L Mann and Huw Pill) voted to increase Bank Rate by 0.25 percentage points, to 4.00%. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)
The vote — and why it moved from June
6 — Hold at 3.75%
Andrew Bailey (Chair)
Sarah Breeden
Swati Dhingra
Clare Lombardelli
Dave Ramsden
Alan Taylor
3 — Rise to 4.00%
Megan Greene
Catherine L Mann
Huw Pill
Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.
Six members voted to hold. Three — Megan Greene, Catherine Mann and Huw Pill — voted to raise Bank Rate to 4.00%. In June, only Greene and Pill dissented. This time, Mann crossed over.
In June, Mann still voted to hold, but her published rationale was already hawkish: she argued that both rapid resolution and a "sporadic continuance" of the conflict could ultimately require an activist hike, while saying she still had time to assess inflation expectations and financial conditions. In July, she concluded that the risk scenario she had been watching had materialised — pointing to the collapse of the US–Iran memorandum of understanding and the widening of the conflict as the key change, with the resulting volatility in energy prices working through to expectations and price-setting behaviour.
The six-member majority did not dismiss the inflation risk. Their argument was that Bank Rate at 3.75%, combined with the tightening in wider financial conditions since the conflict began, was already providing enough restraint for now. Holding gave them more time to assess whether second-round effects were actually emerging, while retaining the option to raise rates later. Huw Pill's rationale for the alternative view was similarly direct: he said it was "appropriate to raise Bank Rate now, thereby cutting through noise in commodity and asset price developments to offer a clear and unambiguous signal" of the Bank's willingness to address upside inflation risks from the Gulf. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)
What the Bank was looking at
Two things were true at once, and the Committee split over how to weigh them.
Inflation actually fell. CPI dropped to 2.6% since the previous meeting — continuing the disinflation trend and coming in below where the Bank stood in June. The majority read this as evidence that the underlying disinflationary process — driven by a loosening labour market and soft demand — remains intact despite the energy shock sitting on top of it.
But energy prices stayed volatile and elevated. Brent crude stood at $84 per barrel and UK gas at 136p per therm as of 28 July — both well above pre-conflict levels, even if off their most extreme spikes. Motor fuel prices accounted for 0.6 percentage points of June's 2.6% CPI inflation rate. The Committee agreed unanimously that risks to energy prices remain skewed to the upside, with the possibility of renewed conflict flare-ups prolonging the volatility.
The dividing line wasn't whether the risks existed — all nine members recognised them. The disagreement was over how much reassurance to take from the underlying disinflation already under way, and from the limited evidence of second-round effects so far. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)
This was a hold with a more hawkish tilt. The Committee explicitly judged that "the risk of strong inflationary pressures was greater than the risk of weak inflationary pressures" — even the six members who voted to hold agreed on that. The disagreement was over whether those risks already justified acting, or whether holding provided enough insurance for now.
Key data points: June meeting vs July meeting
| Indicator |
June meeting |
July meeting |
Direction |
| Bank Rate | 3.75% | 3.75% | — |
| Vote to hold | 7–2 | 6–3 | More hawkish |
| CPI inflation | 2.8% (May) | 2.6% (June) | ↓ |
| Brent crude | ~$79/bbl | $84/bbl | ↑ |
| UK gas (front-month) | n/a | 136p/therm | — |
Bank Rate, vote and CPI: Bank of England Monetary Policy Summary and Minutes, June and July 2026. Brent crude: around $79/bbl immediately before the June meeting, following the Middle East peace deal announcement; $84/bbl on 28 July. UK gas front-month: as stated in the July 2026 minutes (close of business, 28 July).
What this means for you
Tracker mortgage
No Bank Rate-driven change today if your deal directly tracks Bank Rate. Check your specific deal's terms.
Fixed mortgage
Your existing fix is unchanged. New fixed pricing depends more on wholesale rates, funding costs and expectations for where Bank Rate goes next.
Savings
No Bank Rate change for providers to pass through today, although providers can still change savings rates for commercial reasons. Existing fixed-rate savings accounts are unaffected for the agreed term.
What did the Bank of England decide on 30 July 2026?
Bank Rate was held at 3.75%. The MPC voted 6–3 — six members voted to hold, three (Megan Greene, Catherine L Mann and Huw Pill) voted to raise to 4.00%. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)
Why did Catherine Mann switch to voting for a rise?
In June, Mann voted to hold but published a hawkish rationale signalling she was watching closely. In July, she pointed to the collapse of the US–Iran memorandum of understanding and the widening of the Middle East conflict as the key change — describing a "sporadic continuance" of the conflict she says she had flagged as a risk scenario the previous month. She judged that reinforcing policy credibility against inflationary shocks now warranted a 0.25 percentage point rise. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)
Why did the majority still vote to hold?
The hold camp judged that Bank Rate held at 3.75%, combined with the significant tightening in financial conditions since the conflict began, already provides sufficient insurance against upside inflation risks from energy prices — while preserving the option to act later if evidence of second-round effects (wages and prices reinforcing each other) actually emerges. CPI falling to 2.6% supported their view that underlying disinflation remains on track. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)
How does this affect my mortgage?
Tracker mortgage: if your mortgage directly tracks Bank Rate, the benchmark it follows hasn't changed, so there should be no Bank Rate-driven change to your payment — check your specific deal's terms. Fixed rate: your current deal is unaffected, and new fixed pricing depends on wholesale market rates and lenders' funding costs rather than today's decision alone. SVR: your lender decides independently — a hold does not compel them to move it. (Source: Bank of England; FCA.)
How does this affect savings rates?
There is no Bank Rate change for providers to pass through today. But savings rates can still move as banks adjust to funding needs, competition and expectations for future interest rates. Existing fixed-rate savings accounts are unaffected for the agreed term. (Source: Bank of England.)
When is the next MPC decision?
The next scheduled MPC announcement is 17 September 2026, covering the meeting ending 16 September. The remaining 2026 dates are 5 November and 17 December. (Source: Bank of England MPC calendar 2026.)
Could rates rise at the September meeting?
Yes, but July's 6–3 vote does not make a September rise inevitable. The majority said it could tighten further if material second-round inflation effects emerge, while also leaving open the possibility of a different path if inflation risks subside. Between now and September, the key evidence will include energy prices, inflation expectations, wage-setting and the labour market. (Source: Bank of England Monetary Policy Summary and Minutes, 30 July 2026.)