The Bank held rates yesterday. The sentence doing the work is the one about the labour market.

The Monetary Policy Committee held Bank Rate at 3.75 per cent yesterday at noon, on a vote of six to three. The three, Megan Greene, Huw Pill and Catherine Mann, wanted a quarter point rise to 4 per cent. That is one more dissenter than in June, and all three are pushing the same way.

The reason is energy. Crude and refined prices have stayed volatile and higher than before the Middle East conflict, and the Committee judges the risks to inflation are tilted to the upside. On the House of Commons Library's summary of the decision, CPI was 2.6 per cent in June and the Bank's central projection now has it peaking at around 3.2 per cent in the final quarter of this year, against a target of 2 per cent.

So far, an ordinary hold. Now the sentence that matters most.

The Committee's summary says that loose labour market conditions, and higher interest rates faced by households and businesses than before the conflict, will act to reduce inflation over time.

That is standard central banking and it is worth translating, because it carries more weight than any other line in the document. A loose labour market means more people looking for work than there are jobs going. When that happens, people have less power to ask for more money. Pay growth slows. Firms have less reason to put prices up. Inflation comes down.

Put plainly: one of the two forces the Bank is relying on to get inflation back to target is that the jobs market is weak.

Set that against what the Bank's own Agents reported six days earlier. Employment intentions across British firms are broadly flat, and the Agents give three reasons: weak or uncertain demand, labour cost pressures, and increased use of automation.

Precision matters here, because it would be easy to overreach.

That does not establish that automation is causing the slack. The Agents list it third, behind demand and costs. The Bank has not attributed the weakness of the labour market to AI, and this desk is not doing so either. These are two published facts from the same institution in the same month, and the honest description is that they sit beside each other.

What it does establish is that some unknown share of the disinflation the Bank is counting on comes from firms choosing not to replace people who leave, and that at least part of that choice is technological rather than cyclical.

The distinction has one practical consequence. Monetary policy works on the cycle. If firms are not hiring because rates are high and confidence is poor, then in time lower rates bring the hiring back. If firms are not hiring juniors because software now does the work, no rate decision reverses it. That would show up as slack which does not close when the economy recovers. Economists call it structural, and Alan Taylor gestured at the risk in the minutes when he warned about labour-market scarring.

Nobody at the Bank has said the slack is structural. The Committee's stated position is that policy is restrictive and demand is weak, which is a cyclical account. The point is that the instrument which would tell us how much is which does not exist in this country, and that is Elena's piece below.

For a household today, nothing has moved. Bank Rate is unchanged, so a tracker payment is unchanged and a fixed rate is unaffected until it ends. The three votes to raise are the thing worth watching, because they say the next move is more likely to be up than down.