The Bank of England held Bank Rate at 3.75% in June as new survey data pointed to a sharper contraction in Britain’s services sector.

The Monetary Policy Committee voted 7-2 to keep rates unchanged at its meeting ending 17 June. Two members preferred to raise Bank Rate by 0.25 percentage points to 4%, underscoring continuing concern about inflation pressure.

Separate flash PMI data from S&P Global showed the UK Services PMI Business Activity Index falling to 48.7 in June from 49.3 in May. Readings below 50 indicate contraction, and S&P Global described the services figure as a 41-month low.

The combination leaves policymakers facing a difficult trade-off. Higher rates may be needed if inflation risks persist, but weaker services activity points to slowing demand, softer confidence and pressure on employment.

The figures are preliminary and could change in the final PMI release. Even so, they add to evidence that the UK economy entered the political transition period with little spare momentum. For households and businesses, the practical question is whether weak activity eventually pulls inflation lower or whether external energy and wage pressures keep borrowing costs elevated.