Bank of England Minutes comparison — 18 June 2026 vs 30 July 2026
This Bank of England minutes comparison covers 18 June 2026 and 30 July 2026. Overall, the newer document was more hawkish. The July statement holds Bank Rate but sends a clearly hawkish signal: the risk balance is now explicitly skewed to strong inflation, energy price risks are unanimously seen as upside, and a larger minority (three vs two) dissents for an immediate hike. This suggests the MPC is in a firm wait-and-see posture, with a higher bar for cuts and any easing contingent on evidence that the energy shock does not feed into persistent domestic inflation.
What changed
More hawkish. The July statement holds Bank Rate but sends a clearly hawkish signal: the risk balance is now explicitly skewed to strong inflation, energy price risks are unanimously seen as upside, and a larger minority (three vs two) dissents for an immediate hike. This suggests the MPC is in a firm wait-and-see posture, with a higher bar for cuts and any easing contingent on evidence that the energy shock does not feed into persistent domestic inflation.
- Inflation — More hawkish. Inflation outlook tilts hawkish: current explicitly expects inflation to rise further this year and affirms unanimous upside skew to energy prices, while prior framed inflation as mixed with a CPI undershoot but rising expectations.
- Labour Market — Little changed. Labour market characterisation remains dovish in both, with current citing 'slowing wage growth and a soft labour market' versus prior's 'margin of slack' — no material shift.
- Rate Path — More hawkish. Rate path shifts hawkish: the number of dissents favouring an immediate hike rises from two to three, and the committee's explicit risk balance now favours strong over weak inflation, replacing the more balanced cost trade-off language.
- Balance Sheet — More hawkish. Risk balance shifts hawkish: the July statement formally judges upside inflation risk greater than downside activity risk, whereas June balanced the costs of leaning too little against responding too much.
Key wording
In the June Market Participants Survey (MaPS), median expectations had been for Bank Rate to remain unchanged at this MPC meeting and, thereafter, for Bank Rate to remain unchanged for the year ahead. That represented a tightening in the median path of around 50 basis points relative to expectations prior to the conflict, at which point reductions in Bank Rate had been expected.
In the lead up to this MPC meeting, the announcement of a peace deal had contributed to a shift in the OIS curve towards the bottom of its recent range, with an upward slope of around 30 basis points by end-2026. Models used by Bank staff suggested that the upward slope of the OIS curve was driven largely by risk premia.
Twelve-month CPI inflation had been 2.8% in May, unchanged from April, but down from 3.3% in March. The May outturn had been 0.4 percentage points below the short-term forecast published in the April Report.
Households’ near-term inflation expectations had picked up materially since the start of the conflict. The Bank/Ipsos measure of year-ahead expected inflation had risen sharply, from 3.2% in February to 4.0% in May.
Annual growth in private sector regular Average Weekly Earnings in the three months to April had been 2.9%, a touch lower than had been expected in the April Report. On the face of it, this was below the estimates of target-consistent wage growth published in the February Report, but, adjusting for changes in industry mix, private sector AWE growth was around half a percentage point higher.
In ensuring that inflation returned sustainably to the 2% target, monetary policy would continue to need to balance the costs of leaning too little against second-round effects and the costs of responding too much.
Members continued to look through direct effects. But policy would need to guard particularly against second-round effects that created inflation persistence, while considering any trade-off with weaker economic activity.
All members agreed that risks to the paths of energy prices remained skewed to the upside.
Inflation was expected to rise further this year from the direct and indirect effects of higher energy prices.
Set against that, the process of underlying disinflation that was intact prior to the conflict remains in train. That provides some tentative evidence that inherited inflation persistence may be weaker than had been presumed.
Abating domestic inflationary pressures had been supported by slowing wage growth and a soft labour market.
Taking all of the risks into account, the MPC judged that the risk of strong inflationary pressures was greater than the risk of weak inflationary pressures, although there remained a high degree of uncertainty around the outlook.
Official documents
Background reading
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Earlier meeting · Later meeting · Next comparison · Methodology
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