What Just Changed

When we last covered this story, the Bank of England had held rates at 3.75% in March, and the committee was quietly divided. Now we have the April 30 decision — another hold at 3.75% — plus a significant intervention from a major international institution: the IMF.

The IMF is not calling for rate hikes. It's signaling the opposite.

The April 30 Decision

The Monetary Policy Committee held Bank Rate at 3.75% on April 30, 2026, according to the Bank of England's official statement.

The reasoning on record provides context. The BOE explicitly cited Middle East conflict disrupting energy transportation, UK inflation climbing to 3.3% — up from prior projections made before the war — and warned that utility bills are expected to rise further. That 3.3% number sits well above the 2% target.

The BOE also acknowledged the economic chain reaction: businesses facing higher energy costs will raise prices. Workers facing higher bills will demand higher wages. The committee's job is to prevent that second-round inflation from taking hold.

The IMF Pushes Back on Rate Hike Expectations

Before the April meeting, the International Monetary Fund stepped in and told markets to recalibrate expectations.

The IMF upgraded the UK's 2026 growth forecast to 1%, up from 0.8%, according to CNBC. The UK economy is holding up better than feared despite the Middle East energy shock.

More significantly, the IMF said holding Bank Rate at 3.75% through the rest of the year would be sufficient — calling it a "sufficiently restrictive monetary stance." The IMF explicitly told the BOE to retain flexibility to cut rates if second-round inflation effects prove weaker than anticipated.

"Given exceptional uncertainty, the BOE should retain the flexibility to adjust the monetary stance in either direction," the IMF stated.

Markets had been pricing in potential hikes. The IMF's public statement pushed back on that consensus.

Bailey Confirms the BOE Is Taking the IMF Seriously

Governor Andrew Bailey spoke to the BBC on April 16 from the IMF meetings in Washington. He called this a "very big energy shock" and said the impact on rates was "very, very difficult" to judge.

Bailey said the BOE was taking the IMF's position as "serious advice" and would NOT rush to judgment on rate increases. Before the US-Israeli strikes on Iran roughly six weeks ago, the BOE had been widely expected to CUT rates twice in 2026, according to BBC News. That expectation flipped toward hikes almost overnight. Now it's moving back toward a hold — with cuts still in play.

What the Market Was Pricing

Matthew Ryan, head of market strategy at Ebury, told MoneyWeek before the April decision that the MPC would "lean heavily into the uncertainty angle." He noted it was "too soon" to assess second-round inflation effects or know when oil traffic through the Strait of Hormuz would resume.

The BOE did exactly that.

The mainstream narrative going into April was "hold or hike." The IMF and Bailey are keeping "cut" alive as a possibility. The timeline for resumed oil shipping through the Strait of Hormuz remains unknown. The BOE is making rate decisions with a massive variable completely outside its control.

The Next Decision: June 18, 2026

The BOE's next scheduled decision is June 18, 2026. Between now and then, either the energy situation clarifies — or it doesn't.

If oil flows normalize and energy prices plateau, the case for a cut strengthens. The IMF has already positioned that argument.

If the conflict escalates and prices spike further, the BOE faces stagflation: inflation above target and a slowing economy. Raising rates into a slowing economy is a political and economic nightmare.

What This Means for Regular People

Mortgage holders on variable rates: no relief yet, but rate cuts are not off the table. Fixed-rate deals expiring in the next six months should be watched carefully.

Savers: 3.75% still means decent returns on cash savings. The IMF's logic suggests rates may not hold at this level indefinitely.

Everyone paying energy bills: that pain is coming regardless of what the BOE does. Monetary policy cannot control oil prices. The BOE can only manage whether that energy shock becomes a permanent inflation problem. June 18 is when we find out if the BOE and IMF are right.