The Bank of England is expected to hold interest rates in a split vote on Thursday yet a surge in oil prices could complicate the crucial decision. The Bank’s Monetary Policy Committee is widely expected to leave interest rates unchanged at 3.75 per cent. Analysts believe that two members, Huw
Mauricio Alencar 
Sunday 26 July 2026 10:29 am | Updated: Sunday 26 July 2026 10:30 am
The Bank of England is expected to hold interest rates in a split vote on Thursday yet a surge in oil prices could complicate the crucial decision.
The Bank’s Monetary Policy Committee is widely expected to leave interest rates unchanged at 3.75 per cent.
Analysts believe that two members, Huw Pill and Megan Greene, could back a hike in interest rates as they had done previously.
Other potential dissenters could include Catherine Mann, who said tightened financial markets had influenced her vote in June, and Clare Lombardelli, widely seen as a hawk that could take a more cautious view on inflation.
The surge in the Brent crude oil price to just shy of $100 per barrel due to the re-emergence of the conflict in the Middle East is also set to influence the Bank’s members.
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Inflation slowed to 2.6 per cent in the year to June although economists predict that a reset in the energy price cap will mean that inflation will top three per cent in the second half of the year.
Price growth is expected to rise as high as 3.5 per cent. Should inflation hit four per cent, the Bank could be prompted to change course on monetary policy, some City analysts have suggested.
Read more ‘Door is open’ to interest rate hike as inflation fears return
Rate-setters will also be closely monitoring rising inflation expectations and developments on the jobs market, which has reduced wage bargaining powers from workers due to the lack of vacancies and higher unemployment rate.
Interest rates split
Morgan Stanley economists Bruna Skarica, Fabio Bassanin and David Adams said the minutes from the meeting would be “heavily impacted” by prices in energy markets, with further clarity on inflation scenarios to be offered.
A note revealed that the Wall Street bank was projecting a hold in interest rates for the rest of the year as there were “no signs” of inflation spiralling due to higher wage growth demands given weaknesses across the jobs market.
Votes could change if oil and gas prices remained higher for several months, feeding into higher energy bills for UK households and businesses.
BNP Paribas made a more cautious prediction on the upcoming MPC split as it pencilled in three members voting for a hike.
Economists at the bank have also said there will be one interest rate hike in September to pre-empt wage bargaining demands from workers in early 2027.
Read more ‘False dawn’: June inflation falls to 2.6 per cent but analysts say rises ahead
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