The Bank of England has left interest rates on hold at 4%. The decision was finely balanced, at 5:4, as members balanced the challenges facing the economy with inflation concerns. Hargreaves Lansdown’s experts break down what this means for markets, savings and property owners.
The Bank of England has released the minutes from the Monetary Policy Committee: Interest rates and Bank Rate: our latest decision | Bank of England
Steve Clayton, head of equity funds, Hargreaves Lansdown:
“Investors were firmly expecting the rate to stay on hold this month. The Bank has duly done just that, but it has also thrown something of a bone to the markets by going on to comment that it now sees inflationary risks as more balanced and that rates are now likely on a ‘gradual downward path’. That has boosted confidence that the rate cuts that the market was predicting for 2026 will be delivered, which is why we saw the prices of leading housebuilders and retailers jump on the news”.
What it means for savings
Mark Hicks, head of Active Savings, Hargreaves Lansdown:
“The interesting thing for the savings market isn’t that the rate has remained untouched, but that the vote was so close, which could be an indication of the MPC’s appetite for rate cuts in the coming months.
The best rates across the board have been holding on impressively over the past few weeks, particularly in the easy access savings and cash ISA markets, where significant competition among online banks and savings platforms has seen the best rates stay high – and in some cases the best on the market has actually crept up a little. Today’s minutes could put these rates under pressure.
Noises from the Bank about the potential for future cuts could also mean some movement from fixed rate savings. It means anyone who is planning to fix their savings for a period might want to take advantage while so many great rates remain.”
What it means for mortgages
Sarah Coles, head of personal finance, Hargreaves Lansdown:
“A hold means borrowers with tracker rates will have to play the waiting game, but those in the market for a new fixed deal don’t have to wait for the good news. We’ve already seen fixed rates cut by the big banks in recent days, and the fact the vote was so close will cement expectations of rate cuts sooner rather than later, so this may not be the last of the cuts.
This is excellent news for anyone facing a remortgage or looking to secure a deal for a house move, who should be able to track down a decent rate. The HL Savings & Resilience Barometer shows that average monthly mortgage payments peak in our early forties, so this should be a real boom for anyone facing a squeezed middle age. If you’re remortgaging, it’s worth securing a rate as soon as possible, so if mortgage rates continue to drop you can find a better deal elsewhere, and if they surprise on the upside, you’ve already locked a great rate in.”
