Bank of England MPC Votes 5-4 to Maintain Bank Rate at 3.75 Percent - February 2026

Summary

The Bank of England's Monetary Policy Committee voted 5-4 on February 4, 2026, to maintain Bank Rate at 3.75%, with four members dissenting in favor of a 0.25 percentage point cut to 3.5%. UK CPI inflation had fallen from 3.8% in September 2025 to 3.4% in December, with the MPC expecting it to fall back to around 2% from April 2026 as energy price developments and Budget 2025 measures take effect.

Market Impact

The 5-4 majority for a hold, against a sizable minority favoring an immediate cut, signals that the MPC is approaching a closer policy call with the balance tilting toward easing. Bank Rate has already been reduced by 150 basis points since August 2024, and the MPC indicated further cuts are likely as inflation falls toward target. The split vote adds to uncertainty over the pace of future cuts, given rising labour market slack and decelerating pay growth.

Why It Matters

The four dissenting votes for an immediate cut to 3.5% represent the largest dovish dissent since the current easing cycle began in August 2024, signaling that the MPC's consensus for gradual easing is broadening and that future rate decisions will be a closer call.

Key Points

• The MPC voted 5-4 to hold Bank Rate at 3.75%, with four members preferring an immediate 0.25 percentage point reduction to 3.5%, the largest dovish dissent since the August 2024 easing cycle began.
• UK CPI inflation fell from 3.8% in September 2025 to 3.4% in December 2025; the MPC projects inflation to fall back to around the 2% target from April 2026, driven by energy price developments and Budget 2025 measures.
• Bank Rate has been reduced by 150 basis points since August 2024; the MPC stated further reductions are likely, but that judgements around further easing will become a closer call given the balance of inflation risks.
• Pay growth and services price inflation continued to ease, consistent with building slack in the labour market; the MPC identified residual risk from weaker demand causing inflation to undershoot as well as persistence risk from above-target wages.
• UK import prices were contributing to the projected disinflation, with US tariffs and previous energy price falls weighing on global export price growth; global uncertainty from US tariffs and geopolitical risks had increased.

Key Entities

Evidence

At its meeting ending on 4 February 2026, the Monetary Policy Committee voted by a majority of 5-4 to maintain Bank Rate at 3.75%. Four members voted to reduce Bank Rate by 0.25 percentage points, to 3.5%.

Supports: The exact vote split: 5-4 hold with four dissents for an immediate cut to 3.5%

CPI inflation had fallen from 3.8% in September last year to 3.4% in December. Reflecting the impact of monetary policy, wage growth and services price inflation had generally continued to ease.

Supports: The inflation trajectory underpinning the decision: declining from 3.8% to 3.4% with services easing

The restrictiveness of policy has fallen as Bank Rate has been reduced by 150 basis points since August 2024. On the basis of the current evidence, Bank Rate is likely to be reduced further.

Supports: Context: 150bps already cut since August 2024; further cuts are expected