Bank of England Minutes comparison — 30 July 2026 vs 17 September 2026

This Bank of England minutes comparison covers 30 July 2026 and 17 September 2026. Overall, the newer document was more hawkish. The direction of travel between the two meetings is hawkish: the inflation projection was revised up into 2027, the committee said risks had shifted further to the upside, it kept three votes for an immediate rate rise, and the Governor added that policy may have to tighten if second-round effects emerge. For the next decision that implies a hold at 3.75% with a live tightening bias and no near-term cut, with the gilt-sales pace now…

What changed

More hawkish. The direction of travel between the two meetings is hawkish: the inflation projection was revised up into 2027, the committee said risks had shifted further to the upside, it kept three votes for an immediate rate rise, and the Governor added that policy may have to tighten if second-round effects emerge. For the next decision that implies a hold at 3.75% with a live tightening bias and no near-term cut, with the gilt-sales pace now locked in at roughly £46 billion a year.

Inflation — More hawkish. The July framing of an energy-driven but ultimately disinflationary price path has given way to a materially higher near-term profile — CPI now seen at around 3¾% in 2026 Q4 and slightly above 4% in early 2027 — with second-round effects risk judged to have increased since July and the risk balance tilted further to the upside.
Labour Market — More hawkish. The prior meeting leaned on a soft labour market and slowing wage growth as evidence of abating domestic pressure, whereas the current read puts private-sector wage growth at around 3½%, slightly above the MPC's target-consistent estimate, and suggests labour-demand resilience means slack may have already peaked, even though a margin of slack is still acknowledged.
Rate Path — More hawkish. July's hold was wrapped in optionality that included a dovish path back to cutting, while September holds Bank Rate at 3.75% with three named votes for an immediate 25bp hike, a majority resting on market-led tightening already doing the work, and an explicit state-contingent bias that policy may have to tighten if second-round effects build.
Balance Sheet — More hawkish. Balance-sheet policy enters the signal set with a unanimous decision to run the APF to zero at an annual average pace of £46bn — including £20bn of active gilt sales — a widely pre-priced but nonetheless additional tightening impulse that supports higher term premia and leaves Bank Rate as the sole active margin of adjustment.

Key wording

30 July 2026

Inflation was expected to rise further this year from the direct and indirect effects of higher energy prices.
inflation: Near-term inflation path is upward, reinforcing that rate cuts are not imminent.

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.
rate path: Policy bias is to guard against persistence, implying a higher bar for easing.

All members agreed that risks to the paths of energy prices remained skewed to the upside.
rate path: Unanimous upside risk to energy skews the inflation outlook hawkishly.

Abating domestic inflationary pressures had been supported by slowing wage growth and a soft labour market.
labour market: Softness in the labour market is disinflationary, partially offsetting energy-driven hawkishness.

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.
rate path: Explicit risk asymmetry leans hawkish, supporting a restrictive policy stance.

Holding Bank Rate, combined with the significant tightening of financial conditions that had occurred since the conflict started, was providing sufficient insurance against the upside risks to inflation stemming from fluctuations in energy prices. This would allow time to observe further evidence, preserving the option to change Bank Rate in future were the evidence to warrant it.
rate path: Hold with optionality: tight financial conditions act as insurance, but future hikes remain possible if evidence warrants.

17 September 2026

Services inflation had been 3.4% in August, unchanged from July, but down from 4.5% in March. Measures of underlying CPI inflation had remained above target-consistent rates.
inflation: Sticky services and above-consistent underlying inflation argue against easing despite headline CPI being driven by energy.

UK financial conditions had tightened further since the July Report, driven by increases in short-term overnight index swap (OIS) rates.
rate path: Confirms market pricing of a higher rate path feeding straight into household and corporate borrowing costs, tightening conditions without any MPC action.

By contrast, the UK short-term interest rate curve was upward sloping and had risen further since the MaPS response window had closed, peaking at around 4.9% by end-2027. Market intelligence gathered in recent days indicated that the perceived probability of near-term increases in Bank Rate had risen.
rate path: Signals markets are pricing near-term hikes rather than cuts, a hawkish backdrop that raises the bar for any dovish MPC signal.

Other indicators, including pay settlements and timelier HMRC indicators were higher, collectively suggesting that underlying private sector wage growth was around 3½%, slightly above the target-consistent estimate presented in the February 2026 Report.
labour market: Wage growth above the MPC's own consistent level keeps domestic inflation pressure alive, limiting scope for cuts.

The Committee had judged in July that the risk of strong inflationary pressures was greater than the risk of weak inflationary pressures.
rate path: Explicitly asymmetric inflation-risk balance kept over from July, signalling a bias to lean against inflation rather than growth.

Nevertheless, given the passage of time since the onset of the conflict, most members placed more weight on energy prices staying higher for longer in the absence of a lasting de-escalation.
rate path: Majority shifting weight toward the adverse scenario implies a higher-for-longer rate path and less tolerance for cuts.

Official documents

Background reading

Earlier meeting · Later meeting · Previous comparison · Methodology