Target Group comments on BoE MPC decision

17 September 2026

Melanie Spencer, growth director at Target Group, said:

“Today’s decision to hold was widely expected. With oil prices rising in response to the Iran conflict, and inflation running hot as a result, the Bank of England had no room to cut and every reason to keep the door open to a rise if the energy shock persists and the inflationary impact spreads.

“As ever, holding bank rate doesn’t mean conditions have held still. Markets have already priced in the risk of future moves, so lenders are living with tighter conditions before the central bank has even acted. There is some optimism though: a surprise fall in services inflation yesterday – a key figure for the bank – has already pulled gilt yields back from their two-decade high and cooled market expectations of further hikes. But one data point doesn’t undo months of volatility, nor does it bring an end to conflict in the Middle East.

“The focus for lenders has to be agility. Swap rates continue to move sharply and unpredictably, with borrowing costs, competition and demand all moving just as quickly. Lenders that have the capability to adapt and respond to moves in the market will be best placed to ride out this volatility and keep brokers on side.”