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 warns policy may have to tighten

Bank of England Governor Andrew Bailey said in today's minutes that while holding Bank Rate is appropriate at this meeting, the direction of travel is increasingly clear if the Middle East conflict drags on.

"Financial conditions will continue to work to push down on inflation, and holding Bank Rate is appropriate at this meeting," he said. "But if the conflict in the Middle East persists for an extended period, as appears to be the case, and the risk of second-round effects emerging increases, it is likely that policy may have to tighten."

Bailey acknowledged that energy price risks remain firmly to the upside, and that weather conditions are likely to push up food price inflation. On second-round effects – the committee's key watchpoint – he was cautious but not reassured. "There continues to be very limited evidence of emerging second-round effects, though it is still early days," he said.

Three of his colleagues were not willing to wait. Megan Greene, Catherine Mann and Huw Pill again voted for an immediate rise to 4%, each arguing that the risk of falling behind the curve now outweighs the risk of acting too soon. All three pointed to the same core concern: with CPI now projected to exceed 4% in early 2027 – just as wage negotiations get under way – waiting for definitive proof of second-round effects before acting risks allowing inflation to become entrenched, at which point reversing it becomes far more costly.

12:20 p.m.: Industry reacts to the Bank of England's hold decision

The verdict from mortgage professionals is broadly supportive of today's hold – but few are treating it as a signal that the storm has passed.

Steve Cox, chief commercial officer at Fleet Mortgages, called the decision broadly right but warned the pressure is building. "Increasing BBR would do very little to address inflation being generated by global energy prices, while it would immediately increase costs for borrowers on tracker and variable-rate mortgages," he said. "But if inflation and energy costs continue moving in this direction, the pressure to act is likely to become overwhelming."

Melanie Spencer, growth director at Target Group, pointed to a surprise fall in services inflation as a glimmer of hope, but cautioned against reading too much into a single data point. "Holding bank rate doesn't mean conditions have held still," she said. "Markets have already priced in the risk of future moves, so lenders are living with tighter conditions before the central bank has even acted."

Not everyone was convinced the MPC made the right call. Anthony Curtis, director at FORTO Finance, said the rest of the G7's response made the UK's position look difficult to justify. "With energy-driven inflation running at 3.1%, the MPC should have reacted really," he said, predicting that a November rise is now all but certain. "This represents nothing more than a delay – a reprieve even."

For Martin Sims, distribution director at Molo, the focus quickly shifted to what the hold means in practice for landlords. "I don't think landlords suddenly stop being landlords because Bank Rate moves by 25 basis points," he said. "The experienced ones will go back to the numbers."

12:15 p.m.: What it all means for mortgages

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

12:10 p.m.: Key takeaways from the Bank of England's September announcement

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

The decision
The vote split was 6–3 in favour of a hold, with the same three members as July – Megan Greene, Catherine Mann and Huw Pill – again pushing for an immediate rise to 4%. The six who voted to hold were Andrew Bailey, Sarah Breeden, Swati Dhingra, Clare Lombardelli, Dave Ramsden and Alan Taylor.

On inflation
CPI hit 3.1% in August, triggering a formal exchange of open letters between the Governor and the Chancellor. The committee now expects inflation to reach around 3.75% in Q4 2026 and to climb to slightly above 4% in early 2027 – materially higher than it projected in July. Around 0.7 percentage points of the current overshoot is driven directly by energy prices, mostly motor fuels.

On energy prices
Brent crude reached $106 per barrel and UK wholesale gas 207 pence per therm as of 14 September – up 36% and 78% respectively since July. The October Ofgem energy price cap has been set at £1,723, higher than previously expected, and the committee warned it is now expected to rise substantially further in Q1 2027.

On second-round effects
The committee acknowledged there is still little evidence of second-round effects in wage and price-setting – but warned that risk is growing. Members noted that indirect energy pass-through into food and goods prices has so far been weaker than expected, but cautioned this may reflect temporary buffers such as energy hedging and margin absorption rather than a permanent dampener.

On the dissenters
Greene, Mann and Pill each argued the case for pre-emptive action, with inflation now projected to peak above 4% just as 2027 wage negotiations get under way. Mann argued that activity has been stronger than expected, suggesting financial conditions have not been as restrictive as assumed, while Pill said raising rates now would send a clear signal of the MPC's commitment to its 2% mandate. Greene said waiting for definitive evidence of second-round effects would leave policy behind the curve.

What happens next
Several of the six who voted to hold left the door explicitly open to a future rise. Bailey said a hike is likely if the Middle East conflict persists and second-round risks increase. Lombardelli said the case for raising Bank Rate is building. Ramsden flagged tentative signs of labour market stabilisation as a concern. The committee's next scheduled decision is in November.

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

The Bank of England's decision is in, and the central bank has opted to hold its base rate once again.

That means the rate remains at 3.75% for now, but with inflation running at 3.1% and pressure building from lenders and markets alike, attention will turn quickly to what the Bank's language signals about the path ahead.

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 – inflation that has now broken back above 3%, a housing market under strain from weeks of lender repricing, 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.: A rate rise is coming – the only question is when

With the midday announcement approaching, Paul Hampton, owner and mortgage consultant at Approved Mortgage Solutions, told Mortgage Introducer the market has already made up its mind, and lenders have priced accordingly.

"Because the swaps are going up, the lenders are all repricing quickly before it happens," he said. "It's as simple as that. It's the economy, unemployment, the prediction of interest rate rises, and the uncertainty in the Middle East."

Hampton predicted a 5–4 vote split on the MPC, with a quarter-point rise the most likely outcome, but he acknowledged the decision was far from straightforward given the fragility of the housing market.

"I expect a quarter percent rise, but I expect it to be really close. Holding station and not doing anything isn't getting any results."

His comments land against a backdrop that has shifted dramatically from the start of the year, when two rate cuts were still widely expected in 2026. UK inflation has now broken above 3%, the Ofgem energy price cap rose 13% in July, and three MPC members were already on record in favour of a hike at the last meeting. Whatever the MPC decides at midday, the case for cuts has all but collapsed.

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

The Bank of England could become the latest in a string of global central banks to make a move on interest rates in recent weeks – and notably, it will not be doing so alone. The US Federal Reserve voted unanimously on Wednesday to raise its benchmark rate by 25 basis points to a target range of 3.75%–4%, its first increase since 2023. The European Central Bank raised its deposit rate to 2.5% on 10 September – its second hike since the US-Iran war began, citing persistent inflationary pressure from energy prices.

With both the Fed and the ECB now having moved ahead of today's BoE decision, the pressure on Andrew Bailey and the MPC to follow suit has only grown.

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

11:30 a.m.: Executive warns of 'choose your poison' dilemma facing MPC

Nouran Moustafa, executive financial and mortgage adviser at Roxton Wealth, told Mortgage Introducer that the committee faces an uncomfortable decision whichever way it votes today, with political and economic pressures pulling in opposite directions.

"It's either you hold the rate and harm the economy, or raise the rate and harm Westminster," she said. "The bond market is not happy. Unemployment is going up, inflation is going up."

Moustafa said she would personally favour a rise, arguing the economic case for action is clear, but acknowledged that the approaching October Budget adds a difficult political dimension. On the ground, she said remortgage clients are particularly anxious, especially those on tracker products, with some already weighing up whether to break their deal and move to a fixed rate ahead of any further increases.

"I have had some clients reaching out to me and telling me if they raise the rate next time by 0.5% or 0.75%, or if there is any sort of massive increase, they would much rather break the tracker right now and just move to a fixed rate," she said.

Buyers, by contrast, have largely adapted, with many now following swap rate movements rather than the base rate as the more meaningful signal for where mortgage pricing is heading.

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 held interest rates steady throughout 2026 so far, resisting pressure to move in either direction as it weighs the impact of higher oil prices and the ongoing conflict in Iran on the national economy – though today's decision could break that run.

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

11:00 a.m.: August inflation surge narrows the MPC's options

A worse-than-expected inflation reading this week has thrown today's decision wide open.

UK CPI climbed to 3.1% in August, the ONS confirmed on Wednesday, up from 2.9% in July and well above the Bank's 2% target. The general mood among industry figures was one of alarm tempered by resignation, with most having already anticipated a rise but warning that the trajectory makes further MPC action increasingly hard to avoid.

Rob Clifford of Stonebridge said the reading simply confirmed what lenders had already priced in, warning that a hold today would not ease the medium-term inflation fears driving borrowing costs higher. Emma Hollingworth of LSL Financial Services said the data had materially shifted the odds on the MPC's next move, noting that the ECB raised rates last week and markets expect the Fed to follow suit, piling pressure on the Bank to act sooner rather than later. Mark Harris of SPF Private Clients said the chance of a rise – and potentially more – looks increasingly likely, though he suggested the Bank might hold today and wait until November before moving.

The consensus view: today's hold remains possible, but the August data has made a rate rise look less like a question of if and more a question of when.

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 – and today's decision is shaping up to be one of the most closely contested in recent memory.

A Mortgage Introducer poll conducted ahead of the decision found that more than half of mortgage professionals expect the MPC to hold the base rate at 3.75%, but the case for a rise has grown dramatically. Of 133 respondents, 57% backed a hold, while 35% predicted a raise, 2% expected a cut, and 7% said the outcome was too close to call.

That marks a seismic shift from July, when just 11% of respondents called a hike and eight in 10 backed a hold. The swing reflects a market that has had to rapidly reassess its expectations following UK inflation accelerating to 3.1% in August – well above the Bank's 2% target – and a week in which major lenders including Halifax, Nationwide, HSBC, and Santander raised mortgage rates twice as swap rates climbed.

The MPC's July vote was 6–3 in favour of a hold, with Megan Greene, Catherine Mann and Huw Pill all dissenting in favour of a rise to 4%. With inflation now above 3%, that minority view looks considerably less isolated going into today's decision.

For now, a hold remains the most likely outcome, but a rise to 4% is firmly on the table.

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.