RECAP: How the Bank of England reached its latest decision

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That's a wrap!

That just about does it for today's live blog, but as always, make sure to follow Mortgage Introducer throughout the day for more reaction to the decision and what it means for the mortgage market. Thanks for following along!

12:30 p.m.: Bailey holds firm, but dissenting trio push for hike

Bank of England Governor Andrew Bailey said in today's minutes that the underlying disinflation process that was intact before the conflict in the Middle East "remains in train" – and that holding Bank Rate is appropriate given that domestic conditions are on balance more benign than the global picture suggests.

"Holding Bank Rate is appropriate as global conditions look to be more uncertain and inflationary, while domestic conditions are on balance more benign as regards the prospects for inflation," he said.

Bailey acknowledged that risks to energy prices lie to the upside, pointing to the possibility of repeated resumptions of conflict, lower than usual European gas stock levels, and a fall in global refining output. On second-round effects – the committee's key watchpoint – he was cautious. "There is little evidence yet of second-round effects, although it is too early to take much comfort from that," he said.

But three of his colleagues – Megan Greene, Catherine Mann and Huw Pill – disagreed, voting for an immediate hike to 4%. Greene argued that a risk management strategy was appropriate given five years of above-target inflation and the likelihood of second-round effects emerging. Mann pointed to the collapse of the US-Iran Memorandum of Understanding as a key shift, warning that repeated energy shocks were imparting an "upward ratchet" to CPI inflation. Pill cautioned against fine-tuning policy in conditions of such profound uncertainty, arguing that raising rates now would send "a clear and unambiguous signal" of the Bank's willingness to address upside inflation risks.

12:20 p.m.: Industry reacts to the hold decision

The mortgage industry has been swift to respond to this afternoon's announcement, with the general mood one of relief tempered by caution over what the second half of the year may bring.

Steve Cox, chief commercial officer at Fleet Mortgages, welcomed the decision as a common sense approach given the current backdrop, noting that the new prime minister and chancellor will have been relieved to avoid adding to mortgage costs so early in their tenure. But he cautioned buy-to-let landlords against a wait-and-see approach, pointing out that the mortgage market has already been moving ahead of the MPC – with higher swap rates and funding costs prompting lenders to raise pricing in recent weeks. "The next MPC meeting is not until September," he said. "A great deal can happen between now and then, and the direction of mortgage pricing will be determined just as much by funding markets and geopolitical developments as it will by Bank Base Rate itself."

Martin Sims, distribution director at Molo, said the hold was widely anticipated, but argued the more interesting question is how the market has adapted to that reality. He noted a clear shift in broker conversations – away from waiting for cheaper rates and towards making today's deals work – and suggested that professional landlords are getting on with reviewing portfolios and refinancing where it strengthens cash flow. "There's a danger in becoming too focused on the next MPC meeting," he said. "If a property only works because you're banking on lower borrowing costs in a few months' time, it's probably worth asking whether it's the right investment in the first place."

Ryan McGrath, director of second charge mortgages at Pepper Money, said the hold gives borrowers a breather but does not undo the financial pressure that has built up over recent years – noting that swap rates have already moved and many customers are still rolling off far cheaper fixed deals onto significantly more expensive ones. He also pointed to a shift in fixed-rate preferences, with brokers increasingly steering clients towards two-year deals rather than five-year products, reflecting the level of uncertainty still priced into decision-making. Against that backdrop, he said demand for second charge mortgages for debt consolidation remains steady, and is unlikely to ease with the Q4 Budget still to come.

Duncan Kreeger, CEO and founder of TAB, argued the Bank had little reason to move, pointing to three consecutive months of CPI undershooting forecasts, slowing wage growth and softening food price rises. While the collapse of the US-Iran ceasefire had briefly pushed European gas prices higher, he noted that oil had since fallen sharply on renewed hopes for peace – giving the MPC room to hold. "The Bank has shown real patience since the war in Iran began," he said. "That it's continuing to do so is good news for lenders, for brokers and for borrowers alike."

Ben Nichols, CEO of RAW Capital Partners, said the decision would come as a relief to borrowers, noting that the turnaround in economic conditions over the past six months has been such that a hold now feels like a victory. He warned, however, that the holding pattern may not last – with the key variables being how the Middle East conflict unfolds and how markets respond to the Burnham government's policies, including the Autumn Budget. "Lenders and brokers must be agile in responding as these events unfold throughout the second half of the year, ensuring borrowers have both the support and products they need to act with confidence."

12:10 p.m.: What it all means for mortgages

Here's MI's Rommel Lontayao on the Bank of England's latest decision, and its implications for the UK mortgage market:

12:05 p.m.: Key takeaways from the Bank of England's July announcement

The MPC has voted to hold Bank Rate at 3.75%, but the dissent has grown – and the minutes make for cautious reading. Here's what stood out:

The decision

The vote split was 6–3 in favour of a hold, with three members – Megan Greene, Catherine Mann and Huw Pill – pushing for an immediate hike to 4%. That is one more dissenter than June's 7–2 split, and a notable shift in the committee's internal balance.

On inflation

CPI has fallen to 2.6%, but the MPC expects it to rise again later this year as higher energy prices continue to pass through. The committee judges that risks to the inflation outlook are tilted to the upside, while acknowledging there has been little evidence of second-round effects so far. Several members cautioned against reading too much into that absence, given the lagged nature of wage and price-setting dynamics.

On energy prices

Brent crude stood at $84 per barrel and UK wholesale gas at 136 pence per therm as of 28 July – materially higher than pre-conflict levels. The committee noted that risks to energy prices remain skewed to the upside, with concern about repeated re-escalations of the conflict and limited ability to mitigate gas and refined product price pressures over the longer term.

On the economy

The domestic picture is described as broadly benign relative to the global environment. The labour market continues to loosen, with vacancies below pre-pandemic levels, demand remains subdued, and wage growth has moderated to close to target-consistent rates. Several members noted that financial conditions have tightened materially since the conflict began, doing work in the background without a formal rate change.

On the dissenters

Greene, Mann and Pill each made the case for a pre-emptive hike, arguing that five years of above-target inflation, the risk of catch-up dynamics in wage and price-setting, and the ongoing volatility in energy markets warranted action now rather than waiting. Mann pointed specifically to the collapse of the US-Iran Memorandum of Understanding as a key shift, while Pill warned of more insidious second-round effects that could prove lasting even if slow to emerge.

What happens next

The six who voted to hold were explicit that Bank Rate could move in either direction. Dave Ramsden said a hike may be warranted if upside risks crystallise, but that he would consider resuming cuts if they subside. Alan Taylor noted the economy is drifting toward deficient demand and flagged the possibility of downside surprises. The committee's next scheduled decision is in September.

12:00 p.m.: BREAKING: Bank of England holds rates steady

The Bank of England's decision is in, and as expected the central bank has announced no change to its base rate.

That means the rate is once again holding steady at 3.75% for now, although plenty of attention will focus on the Bank's language looking ahead and whether a hike or cut could be in store for the second half of 2026.

11:55 a.m.: Latest BoE decision nearly here

Midday is nearly upon us, and with it the Bank of England's latest call on interest rates.

The MPC has had plenty to weigh up – stubborn inflation, a weakening domestic economy, and the ongoing uncertainty created by the conflict in Iran. We'll have the decision and full industry reaction the moment it lands.

11:50 a.m.: Rate cuts are off the table as BoE decision edges closer

With the midday announcement approaching, Paul Heywood, chief data and analytics officer at Equifax UK, issued a stark assessment of the outlook for borrowers: whatever the MPC decides today, rate cuts are not coming.

"The door looks firmly shut on the prospect of rate cuts for the foreseeable future," Heywood said. "Those on variable mortgage rates are unlikely to see any reduction in their monthly bills this year, while the rising possibility of rate hikes is adding another layer of uncertainty to households, which have so far proven resilient but are without doubt feeling the squeeze."

Heywood's comments are backed by Equifax data showing that one in 10 new UK mortgages are now being arranged over terms of 35 years or more, as borrowers stretch repayment periods to keep monthly payments manageable, accepting higher total costs in exchange for short-term relief. It is a sign, the firm argues, of households adapting to a prolonged period of elevated rates rather than waiting for relief that may not arrive.

The picture has shifted dramatically from the start of the year, when two rate cuts were still widely expected in 2026. The conflict in the Middle East, the 13% rise in the Ofgem energy price cap this month, and two MPC dissenters already on record in favour of a hike have together erased that optimism.

11:40 a.m.: How the BoE's rate stacks up against other global central banks

The Bank of England will become the latest in a string of global central banks to release a new decision on interest rates in recent weeks. Notably, the Bank of Canada held at 2.25% on 15 July, prolonging a string of rate holds, while the US Federal Reserve – under new chair Kevin Warsh – also announced no change at yesterday afternoon's decision, leaving rates at between 3.50% and 3.75%.

Several other central banks have moved in recent weeks. Russia's central bank cut its key rate by 25 basis points to 14.00% on 24 July, its ninth consecutive cut from a peak of 21%. Bank Indonesia held at 5.75% on 22 July after raising rates by a combined 100 basis points in May and June to defend the rupiah. Turkey held at 37% for the fourth straight decision at its July meeting.

Here's how the rate picture looks in other global economies:

11:30 a.m.: Director warns borrowers not to read too much into a hold

David Hollingworth, associate director at L&C Mortgages, told Mortgage Introducer that even if the MPC holds today, borrowers should not take it as a sign that mortgage rates will follow suit, and that those waiting for cheaper deals may be better off acting now.

Hollingworth points to the speed at which conditions have shifted as the key concern. Fixed rates have been rising since the start of July, driven by the resumption of hostilities in the Middle East, and the average best remortgage rates across the top 10 lenders have increased sharply across both two- and five-year products, with deals now costing hundreds more per year than they did a month ago.

"Lower than expected inflation last month may give the Bank of England some room to hold rates again this month, bolstered by a fall in oil prices after the pause in military action," he said. "However, that data is looking backwards, when financial markets are more concerned with what could be coming down the track."

On lender competition, Hollingworth offered a note of reassurance, but paired it with a clear steer on timing. "Borrowers wondering what to do for the best may be better to lock in a rate now to avoid more increases," he said. "They can review again prior to completion to see if rates have improved."

11:20 a.m.: Explainer: How do BoE decisions impact mortgage rates?

It’s a question you’ve probably heard before from your clients – but just in case you’re wondering, here’s the rundown:

When the Bank of England's Monetary Policy Committee (MPC) raises or lowers its base rate, it directly influences the cost of borrowing across the UK economy, including mortgages. Tracker mortgages, which are pegged to the base rate, move almost immediately in response to any decision.

Standard variable rate (SVR) mortgages typically follow within weeks, at lenders' discretion. Fixed-rate mortgages are less directly tied to the base rate; instead, they are priced against swap rates, which reflect financial markets' expectations of where the base rate is heading over the coming years.

This means fixed rates can shift ahead of an MPC decision – or independently of one altogether – if market sentiment changes.

11:10 a.m.: Recap of the Bank of England's latest announcements

The UK's central bank has yet to change interest rates in the year to date, holding steady in each of its 2026 decisions so far as it weighs up the impact higher oil prices and the Iran war are having on the national economy.

Here's a summary of how the central bank has acted in its latest announcements:

11:00 a.m.: June inflation beat gives the MPC cover to hold

A better-than-expected inflation reading last week has helped cement the case for a hold at today's decision.

The general mood among industry figures speaking to Mortgage Introducer was one of cautious relief, with most welcoming the drop while flagging that it is unlikely to last. The energy price cap rose 13% at the start of July, and the conflict in Iran continues to cast a shadow over the inflation outlook for the rest of the year.

Ben Thompson of Mortgage Advice Bureau said the drop puts the BoE's next move back in focus, but noted that weak domestic economic performance still argues against a rate rise. Alex Beavis of LHV Bank called it a likely temporary reprieve, pointing to Iran-driven energy costs as the key risk. Nathan Emerson of Propertymark acknowledged the progress but warned that household affordability remains under strain, with many consumers likely to stay cautious regardless of what the headline figure suggests.

The consensus view: today's hold looks secure, but with a July rebound in inflation widely anticipated, the picture beyond today's decision is far less settled.

10:50 a.m.: Here's what to expect today

Bank of England days are always full of their own unique blend of intrigue and drama – but today's decision looks like a foregone conclusion to most.

A Mortgage Introducer poll conducted ahead of the decision found that eight in 10 mortgage professionals expect the MPC to hold the base rate at 3.75%. Of 134 respondents, 81% backed a hold, while 11% predicted a raise, 6% expected a cut, and 2% said the outcome was too close to call.

Those results broadly track with market consensus. Financial markets were pricing in a hold ahead of the decision – helped in part by a softer-than-expected inflation reading for June, which came in at 2.6%, down from 2.8% in May.

Still, a raise cannot be entirely ruled out. The MPC's June vote was 7–2 in favour of a hold, with Megan Greene and Huw Pill dissenting – and Pill has since said publicly he believes rates will need to rise this year to keep inflation in check.

For now, though, anything other than a rate hold in today's decision would be a surprise.

10:45 a.m.: We’re live!

Welcome along to today’s live blog on the Bank of England decision with Mortgage Introducer! Stay tuned as we provide all the updates from what’s sure to be one of the most closely watched days in the mortgage industry calendar for 2026.

The BoE will be announcing its next call on rates at 12 p.m. today, and we have you covered with all the latest updates and reaction from the mortgage industry.