30 July 2026
If you are covering the Bank of England’s latest interest rate decision, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
"The Bank of England has followed the Federal Reserve in holding interest rates at 3.75% despite increasing noise that rate rises are around the corner. Inflation remains uncomfortably above target, with the latest figure registering 2.6% in June, but with the 13% rise in the energy price cap now in effect, that figure is likely to spike once again.
"The market is pricing in at least one interest rate rise in the UK this year, and with three members voting for an increase today and events in the Middle East show no sign of easing the pressure, this won’t change. Energy prices continue to be volatile as the US and Iran trade missile strikes during what has been a wobbly ceasefire, and this has kept the pressure on prices. The new government has made the cost of living its number one priority and initial announcements will help lower inflation marginally, but not by enough to really make a difference with interest rates
"There is perhaps a realisation that we are once again in a period of higher interest rates, relative to recent history, for a longer period of time than expected. Mortgage providers are reacting accordingly and already raising the rates of their deals so there is clearly a direction of travel.
"The Monetary Policy Committee next meets in September, and a rate rise could be possible by then. However, complicating matters somewhat is the expected Budget from John Healey at some point in the Autumn. With cost-of-living measures expected to be front and centre of this, as well as additional spending commitments looking likely, it may be the BoE sticks to its holding pattern before acting, offering a level of policy stability that is craved right now."
