Impact of Bank of England base rate hold

March 26, 2026 by Brendan O'Neill

Rates

The Bank of England recently confirmed that it will not be reducing the base rate, which came as no surprise to mortgage industry observers.

This is the move that had been widely expected in the wake of the Middle East situation. That has caused UK energy costs and inflation to rise again and has led to lenders withdrawing fixed rate products while raising their other rates. Following its latest monetary policy meeting, the BoE announced that the base rate would be remaining at 3.75% for the moment.

It represents a major change compared with just a few weeks ago, when base rate reductions in both spring and summer had been anticipated. What it shows once again is how vulnerable the UK mortgage market is to global shocks.

However, the position for borrowers is not all doom and gloom. Nicholas Mendes works for the John Charcol broker as a mortgage technical manager. He told Mortgage Introducer:

“For borrowers, a hold in the Bank Rate is unlikely to trigger a major shift in mortgage pricing on its own, because much of the market adjustment has already happened.”

He added that the cost of lending and swap rates had as much influence on fixed rates as the base rate does. Mendes concluded by saying that borrowers should not assume that rates will rise sharply, but that reductions were unlikely in the short term without a change in the global situation.

This could be beneficial to those with CeMAP training, because borrowers nearing the end of fixed rate deals will need urgent guidance.