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Fed & Monetary Policy

Bank of England holds rates and rewrites its bond-sale programme

Rates stayed at 3.75% for a sixth meeting in a row, but the overhaul of quantitative tightening was the decision that moved gilt yields.

Assembled by Claude from 11 sources at 11 outlets · Friday, September 18, 2026, Morning edition, 10:23 AM EDT · no human byline

Disclosure. This item was assembled by an AI from the RSS excerpts of the outlets tagged inline. No human wrote or checked it before publication. Feed selection and categories are editorial choices by Teresa Lo. Nothing here is investment advice.

What happened

The Bank of England held its key interest rate at 3.75% news.sky.com. The Monetary Policy Committee voted 6-3 to hold coindesk.com. It was the sixth hold in a row, and the bank said high energy prices make a future rise more likely bbc.co.uk. Sky News reported that alongside the hold, the bank made an announcement on quantitative tightening news.sky.com.

City AM judged the overhaul of quantitative tightening more important than the rate decision itself cityam.com. Reuters reported that investors cheered a move to pause gilt sales, driving a bond rally reuters.com. ING said the bank surprised it with a big revamp of the quantitative tightening framework, helping 30-year gilt yields fall 12 basis points on the day think.ing.com.

Why it matters to investors

The hold leaves Britain as the outlier. This is Money described the bank as the last major central bank to resist interest rate increases despite growing inflation pressures thisismoney.co.uk. The Wall Street Journal made the same comparison, noting the decision came at a time when the Federal Reserve and the European Central Bank have raised rates wsj.com. Reuters placed the timing precisely: the move came a day after the Fed hiked and a week after the ECB raised borrowing costs reuters.com.

The inflation backdrop is not comfortable. The Economist reported that annual inflation accelerated to 3.1% in August, well above the bank's 2% target economist.com. CoinDesk noted the hold came as an oil surge threatens inflation coindesk.com. The Wall Street Journal said the central bank is monitoring for signs that higher energy costs are spilling over into everyday prices wsj.com.

What to watch

Dissent inside the committee is building while market pricing moves the other way. Three policymakers now want higher rates, yet the market's expected path for bank rate increases has moved in the opposite direction, according to StoneX stonex.com. This is Money reported that Governor Andrew Bailey hinted at a November hike thisismoney.co.uk.

The fiscal read-across is live too. Sky News argued the decision made the chancellor's job a lot easier news.sky.com. The Guardian reported that the prime minister's push to cut the cost of living is threatened by rising inflation and government borrowing costs as geopolitics hit home theguardian.com. For holders of long gilts, the immediate evidence is the yield move ING recorded at the long end rather than anything the bank did to the policy rate think.ing.comreuters.com.

Sources

  1. news.sky.com: The Bank of England just made the chancellor's job a lot easier - here's why - Sky News (2026-09-18)
  2. cityam.com: How has Bank of England changed its bond sale programme? - City AM (2026-09-18)
  3. think.ing.com: Rates Spark: Global long-end gets some relief from the BoE | articles | ING THINK (2026-09-18)
  4. reuters.com: Investors cheer BoE move to pause gilt sales, driving bond rally - Reuters (2026-09-18)
  5. economist.com: World in Brief: Trump approves F-35 sale to Saudi Arabia; Bank of England holds rates (2026-09-18)
  6. coindesk.com: Live updates: Bitcoin edges higher as Nasdaq climbs 1.7% in wake of Fed rate hike (2026-09-18)
  7. thisismoney.co.uk: Bank goes it alone as rates left on hold: Bailey hints a November hike - This is Money (2026-09-18)
  8. bbc.co.uk: Interest rates held but Bank signals rise if energy prices stay high (2026-09-17)
  9. wsj.com: The Bank of England kept its key interest rate unchanged, holding steady at a time when the Federal Reserve and European Central Bank have raised rates (2026-09-17)
  10. stonex.com: Bank of England Dissent Is Growing While the Priced Rate Path Softens - StoneX (2026-09-18)
  11. theguardian.com: Burnham's talk of 'breathing space' at odds with reality of future Bank rate rises | Economics (2026-09-18)