MPC announces decision as energy volatility keeps markets on edge
The Bank of England held its base rate at 3.75% on Thursday, as the Monetary Policy Committee (MPC), voting 6–3, delivered the widely expected decision to leave borrowing costs unchanged for a fifth consecutive meeting.
The MPC's cautious approach reflects continued uncertainty over the global economic and political outlook and its potential effect on prices. Bank Rate, the committee's primary tool for keeping inflation at its 2% target, is currently at its lowest level since February 2023. The most recent official figures show UK inflation at 2.6% in the year to June, down slightly on the previous month.
The Monetary Policy Committee voted 6-3 to keep the interest rate at 3.75%.
— Bank of England (@bankofengland) July 30, 2026
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At its June meeting, the MPC voted 7–2 to hold the Bank Rate, with two members voting for a 25 basis point increase.
The nine-member committee has kept Bank Rate at 3.75% since the final cut of the easing cycle in late 2025, and most analysts expected no change at this month's meeting. Around eight in 10 brokers surveyed by Mortgage Introducer had also forecast a hold.
"Holding the base rate at 3.75% is the right call," commented Joshua Elash (pictured right), founding director of specialist lender MT Finance. "Last week’s fall in inflation was a welcome surprise and Andy Burnham and John Healey should be given time to start implementing their economic vision before the Monetary Policy Committee makes any changes.
“The combination of a static base rate and lower inflation should help to inspire confidence among both lenders and borrowers.”
For Nicholas Mendes (pictured right), mortgage technical manager at John Charcol, the vote split showed a growing minority in favour of an immediate rise to 4%, a signal that patience within the MPC is thinning even as headline inflation improves.
"For mortgage borrowers, the hold does not mean cheaper fixed rates are on the way," he said. "Two- and five-year swap rates, which lenders use to price fixed rate mortgages, both rose by around 0.22 to 0.23 of a percentage point over the past month as lenders including Halifax, HSBC and Coventry Building Society repriced in response to the renewed Middle East escalation.
"A widening vote split, even alongside a hold, tends to keep swap rates elevated rather than encourage lenders to bring pricing back down, since it signals a real chance of a hike at the next meeting rather than a settled position."
On practical steps for borrowers, Mendes said that "anyone with a deal ending in the next six months should secure a rate now rather than wait for a fuller reversal."
"A broker can lock in what's available today while continuing to monitor pricing up to completion, which matters given how quickly the Committee's internal balance has shifted over the past two meetings," he added.
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