The Bank of England kept its key interest rate unchanged at 3.75%, with the Monetary Policy Committee voting 6-3 in favor of a hold, as expected by economists. Three members — Megan Greene, Huw Pill and Catherine Mann — dissented, calling for a 25 basis point hike due to persistent upside inflation risks despite headline inflation falling to 2.6% in June, a 15-month low. Committee members warned that energy price risks remained skewed to the upside, citing Red Sea tensions and AI-related hardware supply constraints. The pound rose 0.08% to $1.3376 following the decision. An economist at Aberdeen noted that the increase in dissenters from two to three reflects growing concerns within the committee, raising the likelihood of rate hikes if inflation does not ease further, with a September meeting remaining a possibility.
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