The Bank of England has today announced that it will hold the Base Rate at 3.75%, keeping interest rates unchanged as policymakers continue to balance inflation risks against signs of a softer economy.
At its June meeting, the Monetary Policy Committee (MPC) voted by a majority of 7–2 to maintain the Bank Rate at its current level. Two members voted to increase rates to 4%, reflecting ongoing concern that higher energy costs could continue to feed into inflation.
The decision comes as CPI inflation has fallen to 2.8%, although it remains above the Bank’s 2% target. The Bank said global energy prices have fallen since the previous meeting, but remain higher than before the conflict in the Middle East and continue to be volatile.
For homeowners, buyers, sellers and landlords, today’s announcement brings another period of stability, but not necessarily lower borrowing costs straight away. Mortgage pricing is likely to remain sensitive to inflation expectations, swap rates and lender appetite over the coming weeks.
The Base Rate is the interest rate set by the Bank of England. It influences the rates offered by banks and building societies on mortgages, loans and savings.
When the Base Rate rises, borrowing usually becomes more expensive. When it falls, mortgage rates and other borrowing costs can become cheaper, although this does not always happen immediately.
By holding the Base Rate at 3.75%, the Bank of England has chosen to keep policy steady for now while it monitors inflation, energy prices, wage growth and the wider economy.
The next Base Rate decision is due on 30 July 2026.
According to the Bank of England, the impact of the conflict in the Middle East on energy prices and the UK economy ‘remained the dominant source of uncertainty for the inflation outlook.’
In reaching its decision to hold Base Rate at its current level, the MPC noted that UK monetary policy could not influence global energy prices and that it would take time for a change in policy to work through the economy.
As such, any action the MPC might take would not prevent higher inflation over the coming months.
Twelve-month CPI Inflation was 2.8% in the 12 months to May. This was the same as in April but lower than the 3.3% recorded in March.
Inflation in May was lower than the Bank of England had expected. Prices rose less quickly than forecast across several areas, including food, goods, and services. Food prices made the biggest difference, with food inflation falling to 2.2%.
However, higher energy and fuel prices have recently put some upward pressure on inflation.
Overall, the tone from the Bank remains cautious, as unprecedented global events continue to shape economies worldwide.
“Our remit recognises that attempting to bring inflation back to the target too quickly may cause undesirable volatility in output,” said Andrew Bailey, Governor of the Bank of England.
“Given the context at present of softness in the real economy and uncertainty around the scale and duration of the shock to energy prices, tolerating temporarily above-target inflation as part of a return to target is an appropriate way to approach the trade-off, providing inflation expectations remain contained.”
For homeowners, today’s decision means there is no immediate change to the Bank of England Base Rate, but the effect on monthly payments will depend on the type of mortgage you have.
If you are on a fixed-rate mortgage, your monthly repayments should remain the same until your current deal ends.
If you are on a tracker mortgage, your rate is usually linked directly to the Base Rate, so a hold means your payments are unlikely to change as a direct result of today’s announcement.
If you are on a standard variable rate, your lender can decide whether to make changes, although a Base Rate hold gives lenders less reason to move rates sharply in the short term.
Homeowners approaching the end of a fixed-rate deal should still review their options early. Mortgage rates remain higher than many borrowers were used to in previous years, and securing advice in advance can help you understand what products may be available before your current deal expires.
For buyers, the decision offers some reassurance. A hold avoids the immediate pressure of another rate rise and gives the market a clearer sense of where borrowing costs currently stand.
However, buyers should not assume that mortgage rates will fall quickly. Lenders are still watching inflation, energy prices and financial markets closely, which means mortgage pricing may continue to change.
Preparation remains key. Before viewing properties or making an offer, buyers should understand their budget, check their deposit position and, where possible, secure an agreement in principle.
If you are buying with a mortgage, speaking to one of Edward Mellor’s in-house mortgage advisers can help you understand what you may be able to borrow and which options could suit your circumstances.
Being organised early can make a real difference, especially in a market where well-priced homes can still attract strong interest.
For sellers, a hold in the Base Rate is not bad news. Stability can support buyer confidence, particularly among those who may have been waiting for more clarity before committing to a move.
While today’s announcement is unlikely to trigger a sudden surge in activity, it does remove one layer of uncertainty. Buyers who have already arranged their finances may feel more confident about progressing with a purchase.
That means pricing and presentation remain extremely important. Homes that are marketed accurately and shown at their best are more likely to attract serious buyers.
If you are thinking of selling, now is a good time to understand your property’s current market value. A free property valuation from a local expert can help you set the right asking price and plan your next steps with confidence.
For landlords, the Base Rate hold suggests borrowing costs may remain steady for now, but not necessarily low.
Buy-to-let mortgage rates are still influenced by wider market conditions, and landlords approaching a refinance may find that their new deal is more expensive than one taken out several years ago.
This makes it important to review the performance of each property carefully. Rental income, maintenance costs, mortgage repayments and long-term capital growth should all be considered when deciding whether to hold, sell or expand a portfolio.
For some landlords, today’s decision may support a period of review rather than immediate action. Others may see opportunities if motivated sellers come to market or if buyer competition remains more measured.
As ever, the right approach will depend on your funding position, investment goals and timescales.
The key takeaway from the June 2026 announcement is that the Bank of England is keeping rates steady while it waits for clearer evidence on inflation and the wider economy.
Bank Rate remains at 3.75%, inflation is still above the 2% target, and policymakers have made clear that energy prices and global uncertainty remain important factors.
For homeowners, buyers, sellers and landlords, this is a market that continues to reward preparation, realistic pricing and good advice.
Whether you are reviewing your mortgage, planning a move, selling a property or considering your next investment, having the right support in place can help you make informed decisions.
To find out how the latest Base Rate decision could affect your plans, get in touch with Edward Mellor today.
With over 40 years of proven experience in helping people buy, sell and manage property, our local experts are here to guide you through every stage of your property journey.
Sources
1 – Bank of England: Bank Rate maintained at 3.75% – June 2026 Monetary Policy Summary and Minutes
2 – Bank of England: Interest rates and Bank Rate – latest decision
3 – BBC News: Bank of England interest rates live coverage, June 2026
Photo © N Chadwick (cc-by-sa/2.0)
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