BoE Hails Rate Stasis at 3.75% as Inflation Remains 3.4% Above Target

The Bank of England is expected to keep its main interest rate at 3.75% on Thursday, as inflation remains 3.4% above the 2% target and economic growth is strengthening. The BOE has trimmed rates every three months since December 2024, with further reductions likely this year. With early 2026 data indicating stronger demand and stickier prices, upcoming inflation readings will be critical in determining future policy moves. Lower rates can boost spending and investment but risk fueling inflation, prompting policymakers to balance growth and price stability. Prime Minister Keir Starmer’s government seeks a sharp easing in inflation to support borrowing and business activity.