The MPC Held at 3.75% on 30 July With a 6-3 Vote. Oil Just Hit $90, the IEA Says Stockpiles Are Collapsing, and the Next Meeting Is 36 Days Away.

The MPC voted 6-3 to hold Bank Rate at 3.75% on 30 July — the seventh consecutive hold since December 2025. That's the headline. The subtext matters more: the majority shrank from 7-2 in June. Megan Greene, Catherine L Mann, and Huw Pill all voted for a 0.25 percentage point increase to 4%.

The hawkish trio's argument, laid out in the minutes, is worth reading in full: they "were less reassured on the underlying disinflationary process, were concerned that second-round effects could be material, and thought it relevant that inflation had exceeded the 2% target for more than five years." That last point is the one nobody wants to talk about. UK inflation has been above target since May 2021. Five years. The MPC's own credibility is now a variable in the equation.

The six-member majority — Bailey, Breeden, Dhingra, Lombardelli, Ramsden, and Taylor — argued that "little evidence of material second-round effects" had emerged so far. They're not wrong about the backward-looking data. CPI fell to 2.6% in June from higher levels earlier in the year. Services inflation is moderating. Wage growth is slowing. But the MPC's own minutes acknowledge that "given lags in pass-through, this could not be taken as a strong signal about their future emergence."

This is the core tension. The doves are voting on data that's already two months stale. The hawks are voting on where oil prices — and by extension, inflation — are going. And between 30 July and 12 August, the hawks' case has strengthened materially. Oil is up $6 a barrel. The IEA is sounding alarms. Hormuz is closed indefinitely. If the MPC voted today, would the majority still be 6-3?

For a deeper look at what this means for your borrowing costs, see our analysis: The BoE Just Held at 3.75% for the Sixth Straight Month — Your 4.66% Fixed Rate Is a Bet Against Every Signal the Market Is Sending.

The IEA's August oil market report, published this morning, contains two sentences that should terrify anyone betting on rate cuts before 2027: "observed stocks had fallen below 7.9 billion barrels for the first time since April 2025" and "the urgency of reopening the Strait has increased, as previously available inventory buffers are rapidly depleting."

The Guardian's business live blog reports that the IEA has slashed its global supply forecast: output is now expected to fall by 4.3 million barrels per day in 2026, to 102 mb/d, as growth of 1.4 mb/d from the Americas only partly offsets Middle East and Russian losses. Oxford Economics has revised its forecasts upward — $85 average through end-2026, only gradually declining to $65 by end-2027.

This is a structural supply shock, not a temporary spike. The Iran-US ceasefire that briefly reopened Hormuz in June has collapsed. Rezaei's statement that the Strait stays closed "until the conditions it demands from the US are met" — including release of frozen assets and an end to other regional conflicts — signals a negotiating position designed to be unacceptable. Pakistan's defence minister floated the idea of a deal yesterday, but Iran shut it down within hours.

What does $90 oil mean for UK inflation? The MPC's July minutes noted that motor fuel alone contributed 0.6 percentage points to the June CPI reading of 2.6%. At $90 — and with the IEA warning of further depletion — that contribution is only going up. The MPC's central projection assumed energy prices around the 15-day average to 20 July. Those assumptions are already obsolete.

The Bank's own language is telling: "risks to energy prices remain skewed to the upside" and the Committee "remained attentive to the risk that consumer energy prices could stay elevated for longer." The question is no longer whether energy will push inflation higher — it's how much, and for how long.

The Ofgem price cap currently sits at £1,862 for a typical dual-fuel household — a level that pushed 13.5 million households into fuel poverty when it took effect on 1 July. The next reset, due in October, was supposed to bring relief. Wholesale prices were falling through June. The swaps market was pricing a cap below £1,654.

That scenario assumed peace. It assumed Hormuz reopening. It assumed Brent in the $70s. On 12 August, with Brent near $90, the IEA warning of depleting stockpiles, and the Strait closed indefinitely, those assumptions are dead.

The political dimension is intensifying. The Prime Minister admitted this morning that cost of living support is "not enough" and hinted at further measures. Andy Burnham's team is floating stamp duty abolition and council tax reform — both responses to an electorate that's being squeezed by housing costs and energy bills simultaneously. The government has already announced £250 annual bill discounts for homes near new pylons. But £250 doesn't touch the sides of a £1,862 energy cap when wages are growing at half the rate of inflation.

The heatwave context makes this worse. The Guardian reports that UK heatwaves may have cost the economy £4.4 billion in lost output so far this year. The National Energy System Operator issued a rare summer market notice this morning forecasting a 1.2 GW electricity shortfall during today's solar eclipse, as air conditioning demand collides with lost solar generation. Britain's energy infrastructure is being tested from both sides — supply constraints from global oil markets, and demand spikes from domestic climate extremes.

The mortgage market tells a story the MPC's majority doesn't want to hear. Best-buy rates have crept down marginally — a 2-year fixed remortgage at 4.43% according to Moneyfacts data, a 5-year fix at 4.48%. First-time buyers can access 4.58% on a two-year fix at 90% LTV. These are better than the 5.62% average reported in late July.

But the gap between best and average is the signal. The average 2-year fixed mortgage rate remains stubbornly elevated because lenders are pricing swap rates that reflect persistent upside risk. The yield curve is upward-sloping — shorter-dated swaps cheaper than longer-dated ones — which tells you the market expects rates to stay higher for longer, not to fall.

The July MPC minutes confirm this: "financial conditions had tightened materially compared with prior to the conflict, which had increased financing costs faced by households and firms." The Committee noted that this tightening "in part reflects the energy-related upside risks to inflation" and "is weighing on any nascent inflation pressures." Translation: the market is doing the MPC's tightening for it, and the Committee knows it.

For borrowers, the calculation has changed. When the developing story article was last updated on 3 July, the case for fixing was about locking in a rate before cuts that might never come. Now the case is different: fix before the oil-driven inflation that's already happening forces lenders to reprice upward. The window between the MPC's July hold and its September meeting is 49 days. Thirteen of them are already gone. If Brent breaks above $95 — and the IEA's language suggests it could — swap rates will spike, and mortgage rates will follow within 48 hours.

For the counter-argument, read our debate: Fixing Your Mortgage at 4.66% Looks Expensive Until the BoE Reverses — Then It's the Cheapest Insurance You'll Ever Buy. And if you're considering overpaying instead of fixing, see Your Mortgage at 4.92% Is Costing You £4,920 a Year on Every £100,000 — Overpaying That Is the Only Guaranteed Return Left in 2026.

Savings rates are caught in the same crossfire. The developing story summary from late July noted 1-year fixed savings averaging 4.27% and easy access at just 2.55%. The direction of travel since then has been down — not up — because swap rates, which drive fixed savings pricing, have been grinding lower on expectations that the next move in Bank Rate is still a cut, even if it's pushed further into the future.

This creates a perverse outcome for savers: inflation is rising (CPI at 2.6% and climbing), oil is surging (adding to the inflation impulse), but savings rates are falling because the market still believes the MPC will eventually cut. The real return on a 1-year fix at 4.27% with inflation heading toward 3% is barely 1.3% — and that's before tax.

For anyone with cash to deploy, the message is unambiguous: lock fixed-rate savings now. The window for 4%+ on a 1-year fix is closing. By the time the MPC meets on 17 September, the best 1-year offers could be below 4%. The savings hub has our latest analysis on where to find the best rates. If you're holding cash in easy access at 2.55%, you're losing money in real terms every month oil stays above $80. For the view from the tax-sheltered side of savings, see Your Cash ISA Earns 4.51% and CPI Just Fell to 2.8% — The Government Is Cutting Your Allowance Anyway.

The gilt market confirms the direction. UK 10-year gilt yields stood at 4.796% in June, down from 4.942% in May — a 15 basis point decline that reflects the market pricing lower terminal rates even as near-term inflation risks build. This is the yield curve inversion dynamic that preceded the 2022 Truss episode: short-term danger, long-term complacency. Savers should be wary of locking beyond 2 years unless the rate premium is substantial.

The next MPC decision is 36 days away. Between now and then, several events will reshape the Committee's calculus:

Today: US July CPI data (1:30pm BST). A hot print — anything above 0.2% month-on-month for core — would force Fed Chair Kevin Warsh's hand. Saxo's Neil Wilson notes that "the Fed will have to follow through with at least one hike this year." A Fed hike in September would give the MPC's hawks ammunition: if the world's reserve currency central bank is tightening, can Threadneedle Street really hold?

Late August: UK July CPI. The June reading of 2.6% was pre-escalation. July's data will capture the first effects of oil moving from $73 to $84. If headline CPI prints above 2.8%, the "little evidence of second-round effects" narrative starts to crack.

Early September: August PMIs. The services PMI collapsed to 48.8 in June — contraction territory. If August shows continued weakness, the doves can argue the real economy can't absorb higher rates. If it stabilises, the hawks get a clearer runway.

Ongoing: Strait of Hormuz. Every day the Strait stays closed, global oil stocks deplete further. The IEA's warning today is not just about current levels — it's about the trajectory. If stocks keep falling at the current rate, Brent above $100 becomes a matter of when, not if.

The MPC's July minutes contain an important sentence: "monetary policy could need to react before the risks around inflation persistence materialised conclusively." That's the Committee telling you it's prepared to hike pre-emptively. The question is whether 6-3 becomes 5-4, or even 4-5, between now and 17 September.

The Bank of England's monetary policy page confirms Bank Rate at 3.75% with the next decision due 17 September 2026. CPI inflation stands at 2.6%, above the 2% target. The math is simple: if oil stays above $85, CPI will head toward 3% by autumn, real wages will stay negative, and the MPC will face a choice between credibility and growth. The July vote suggests credibility is gaining votes.