A hold at 3.75% is the consensus call, but vote split may prove more telling than the decision itself
The Bank of England is set to make its fifth interest rate decision of the year on Thursday, with the Monetay Policy Committee (MPC) widely expected to hold the base rate at 3.75% when it announces its verdict at midday.
The nine-member committee has held Bank Rate at 3.75% since the final cut of the easing cycle in late 2025, and most analysts expect that to remain unchanged today. But this meeting carries more weight than a routine pause — and there will be plenty for mortgage and housing market watchers to read into beyond the headline number.
Every economist surveyed in a Reuters poll published last week expects the Bank to leave Bank Rate unchanged at 3.75% at the June meeting, with median forecasts pointing to no movement for the remainder of 2026. Yet nearly 40% of respondents forecast at least one hike before the year is out, while only six anticipated a cut.
Similarly, nearly nine in 10 brokers surveyed by Mortgage Introducer expect the central bank to hold rates today.
Source: Mortgage Introducer survey results
The meeting is taking place against an unusually complex backdrop. The conflict in the Middle East has created significant uncertainty around global energy prices, with direct implications for the UK's inflation outlook. CPI remained at 2.8% in May, but is expected to climb later this year as higher energy costs feed through to household bills and business costs.
At its meeting in April, the MPC voted 8–1 to hold Bank Rate at 3.75%, with one member voting to increase it by 25 basis points to 4%. That dissent — the first vote for a rate increase since the tightening cycle concluded in summer 2023 — signals that at least one policymaker now considers the current stance insufficiently tight given the inflation outlook.
Division within the MPC remains. Chief economist Huw Pill and external member Megan Greene have signalled they will vote for an immediate rate rise, while Catherine Mann has suggested she is open to a rise at some point if the energy crisis worsens. As a result, investors will be watching the vote split and post-meeting comments closely for signals on the Bank's forward thinking.
Governor Andrew Bailey's statement several weeks ago that the MPC is "in no rush to raise rates" is widely read as a signal that a hike is not imminent — but it does not rule out tightening later in the year. Oxford Economics believes the Bank will hold rates at their current level for the rest of 2026 and well into 2027, while ING's James Smith has said the firm is "pencilling in a one-and-done rate rise this summer."
For borrowers, the backdrop has changed considerably from the rate-cut optimism that defined much of last year. Before the conflict in the Middle East broke out, two rate cuts were expected in 2026. Interest rate forecasts have swung wildly since, with markets pricing in as many as four hikes in March at the height of the uncertainty.
Major mortgage lenders including NatWest, Barclays, TSB and Santander have continued to cut fixed mortgage rates in June, following recent rapid hikes. Sterling swap rates have eased through April and May, consistent with markets expecting Bank Rate to stay near current levels rather than rise — and that softening is what has allowed lenders to trim fixed pricing even though Bank Rate itself has not changed.
Stay tuned for all of Mortgage Introducer's coverage of the Bank of England announcement this afternoon.
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