The Bank of England holds interest rates at 3.75%

The Bank of England holds interest rates at 3.75%

17 Sep 2026

The Bank of England holds interest rates at 3.75%, in line with market expectations.

Emma Coleman, Head of Credit Research at XPS Group, comments:

“Although pension schemes won’t be significantly impacted by today’s decision, they continue to pay close attention to how government bond yields change. This is especially relevant at longer maturities, given schemes use government bonds to hedge their long-dated liabilities.

“Recent weeks have seen a notable rise in government bond yields across the curve. This has been partly driven by global factors, including geopolitical tensions in the Middle East and their impact on energy prices and inflationary expectations. In the UK, the move has been particularly pronounced at the long end of the gilt market, reflecting persistent inflation above the Bank of England’s 2% target and ongoing fiscal concerns around high government borrowing and debt costs.

“For many schemes, higher gilt yields have supported funding levels by reducing liability values. However, with the Autumn Budget looming, schemes should prepare for continued gilt market volatility and ensure their investment and hedging strategies remain resilient to further market changes.”