Base Rate holds with increases expected
September 26, 2026 by Brendan O'Neill
Rates
The Monetary Policy Committee at the Bank of England has opted to keep the base rate at the same level for now.
Six members of this committee voted in favour of holding the rate at 3.75%, while three of them wanted to raise it to 4%. The committee met at a point when inflation is rising again, both in the UK and globally. According to the Consumer Price Index, UK inflation hit 3.1% last month, whereas in July it was 2.9%.
There will be some relief for mortgage advisors and their clients that the base rate has not gone up. It could be a temporary state of affairs though, as many observers expect it to be increased before too long. Markets are predicting three rises before the end of this year.
Richard Carter works for Quilter Cheviot as its fixed interest research head. He stated that the Bank of England was going against other central banks by resisting a rise. He also pointed out that much of the worldwide inflation was being caused by the war in the Middle East, which is not something the Bank of England can influence.
Octane Capital CEO Jonathan Samuels was quoted by Financial Reporter as saying:
“A cut would have been preferable for borrowers, but a hold at least avoids adding further pressure in the immediate term.”
He went on to add that swap and mortgage rates would be determined by how long inflation continues.
Mortgage advisors with the CeMAP qualification will be watching the situation closely so they can guide their clients.
Written by
Brendan O'Neill
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