Bank of England September 2026 — Will the Hawks Win This Time?
Three MPC members voted for a rate rise in July. Headline inflation has since jumped back to 2.9% — but core and services inflation tell a more complicated story. Here's what could decide the 17 September vote.
Where things stood after July
The MPC held at 3.75% in July, but the vote moved from 7–2 to 6–3 — Catherine Mann joined Megan Greene and Huw Pill in voting for an immediate rise to 4%. The Committee's own judgement, in its own words, was that "the risk of strong inflationary pressures was greater than the risk of weak inflationary pressures." Six members still preferred to hold, judging that Bank Rate at 3.75% combined with already-tighter financial conditions provided enough insurance for now — but that was a genuinely closer call than June's 7–2 split suggested. See our for the detail.
What's changed since — headline inflation has jumped back to 2.9%
Headline CPI inflation rose to 2.9% in the 12 months to July, up from 2.6% in June — the first increase in the annual rate since March 2026. Housing and household services, and furniture made the largest upward contributions to the change in the annual rate; transport made the largest, partially offsetting, downward contribution. Energy was an important part of the story: gas prices rose 14.7% in July following a change in Ofgem's energy price cap — the largest rise in gas prices since October 2022 — with the typical annual dual-fuel direct-debit bill rising by £221 to £1,862. It was also the first assessment period where prices had been affected by the outbreak of the conflict in the Middle East.
But the underlying picture is more mixed than the headline number suggests. Core CPI held flat at 2.6%, unchanged from June. Services inflation actually eased, from 3.6% to 3.4%. That matters because the MPC isn't simply asking whether headline inflation is above target — it's watching for evidence that the energy shock is becoming embedded in domestic prices and wages, and July's data doesn't show that happening yet.
The rise is also consistent with what the Bank itself already expected: in July, the MPC had forecast that higher energy prices would push inflation up later in the year. For the hawkish minority, the bigger question isn't whether headline CPI rose — it's whether that initial energy shock begins feeding into wider prices, wages and inflation expectations. So July's data strengthens one part of the hawkish argument, but it doesn't settle the September decision.
The next data point that actually lands before the decision is August's CPI figure, released by the ONS at 7:00am on 16 September — the day before the MPC announces. It will be one of the freshest major data points available around the meeting: another rise — particularly if accompanied by firmer core or services inflation — would strengthen the hawkish case; a figure showing the energy effect fading without spreading further would support the hold camp's view that underlying disinflation remains intact.
| Indicator | June meeting | July meeting | Latest |
|---|---|---|---|
| Bank Rate | 3.75% | 3.75% | 3.75% |
| MPC vote | 7–2 hold | 6–3 hold | — |
| Headline CPI | 2.8% (May) | 2.6% (June) | 2.9% (July) |
| Core CPI | — | 2.6% | 2.6% |
| Services CPI | — | 3.6% | 3.4% |
| Inflation target | 2.0% | 2.0% | 2.0% |
What to actually watch for on the day
Sarah Breeden
Swati Dhingra
Clare Lombardelli
Dave Ramsden
Alan Taylor
Catherine L Mann
Huw Pill
- The vote split, not just the rate. A 5–4 vote to hold would be a materially different signal from another 6–3 hold — especially if two members who held in July had moved toward a rise.
- Whether Catherine Mann stays with the hawks. She moved from hold-but-hawkish in June — describing upside inflation risks as increasingly prominent — to actually voting for a rise in July, explicitly citing the collapse of the US–Iran memorandum of understanding and widening conflict. Her position has already moved once this cycle, which makes it worth watching specifically rather than assuming it's settled.
- Any language on second-round effects. In July, the MPC said there was still little evidence that higher energy costs were generating material second-round effects in prices and wages. The six-member majority nevertheless acknowledged that additional policy restraint could be needed if such effects emerged. A meaningful change in that language would be an important signal of where the Committee's collective view is moving.
- The final run of data. Before the meeting, the MPC will also get updated business intelligence: the August Decision Maker Panel data on 4 September and the Bank's Agents' summary of business conditions on 11 September. August CPI then lands on 16 September. Together, those releases will help show whether higher energy costs are starting to affect firms' prices, wages and expectations more broadly — directly bearing on the second-round-effects question above.
What this means for you, before the decision
If you're looking at a new mortgage or remortgage, a rise is not guaranteed but is more plausible now than it was in June — new fixed-rate pricing depends on swap rates and lender funding costs, which move ahead of the announcement based on market expectations, not on the decision itself. Locking in a rate you're comfortable with now doesn't require guessing right on 17 September. If you're already on a fixed-rate mortgage, the September decision won't change your contractual rate during the fixed period.
If you're a saver, savings rates don't move mechanically with Bank Rate — providers also respond to competition, funding needs and their own market expectations. A hold wouldn't force an immediate change to existing products, while a rise could put upward pressure on some new savings rates, but providers aren't obliged to pass it on in full or immediately.