The Bank of England has decided to keep its interest rate at the current level. This decision is seen as a response to the slowing inflation and geopolitical risks stemming from the Middle East.
The Monetary Policy Committee (MPC) of the Bank of England announced on July 30 that it has frozen the interest rate at 3.75%. Of the nine members, six voted in favor of maintaining the rate, while three expressed differing opinions.
This marks the fifth consecutive decision to hold rates steady since December of last year, aligning with market expectations. Policymakers had previously lowered rates four times throughout 2025.
The recent vote highlights differing views among committee members regarding inflation concerns and responses to price instability linked to the Middle East.
On the previous day, the U.S. Federal Reserve also decided to keep its interest rate steady at 3.50% to 3.75%. Federal Reserve Chair Kevin Warsh reaffirmed the commitment to a strong response for price stability.
According to the Office for National Statistics (ONS), the UK's consumer price index (CPI) rose by 2.6% year-on-year last month, a decrease from the previous month's 2.8%. Although this drop was larger than expected, the rate has remained above the target of 2.0% for 21 consecutive months.
Concerns have grown over potential disruptions in oil transport through the Strait of Hormuz due to renewed military clashes between the U.S. and Iran, which have pushed international oil prices higher.
Brent crude, a global energy benchmark, rose from around $71 per barrel three weeks ago to surpass $100 recently, trading at approximately $92 on the day of the report.
Market attention is now focused on the fiscal policies of newly appointed UK Prime Minister Andy Burnham. There are concerns that the new government's tax and spending policies, aimed at stimulating the economy and stabilizing livelihoods, could inadvertently reignite inflationary pressures.
* This article has been translated by AI.
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