Bank Rate Held at 3.75%, FTSE 100 Near Record Highs: What It Means for Your Money

Two things are worth watching in UK markets this week: interest rates are staying put for now, and the FTSE 100 has just had one of its strongest weeks of the year.

Interest rates: steady, for now

The Bank of England's Monetary Policy Committee voted 7–2 in June to hold Bank Rate at 3.75%, and markets widely expect the same outcome at the next MPC decision on 30 July 2026. As of 2 July, financial markets were pricing in a hold for the rest of the year, rather than the cuts some had expected earlier in 2026.

That matters directly for anyone with a mortgage, savings account, or credit card, since Bank Rate feeds through to the cost of borrowing and the return on cash savings across the economy.

FTSE 100: a volatile few days

The FTSE 100 jumped 1.7% on 2 July to 10,653 — its highest close since 17 April — driven by a rally in defensive, pharmaceutical and aerospace stocks, with AstraZeneca up more than 5% and GSK up over 4%. By Friday 3 July, the index had eased back slightly to around 10,643 as investors digested a weaker-than-expected US jobs report showing June job growth slowing to just 57,000.

Why this happens together

Rate holds and stock market moves are connected. When a central bank signals it isn't cutting rates soon, that can support the currency and change how investors value future company earnings. Meanwhile, weaker US employment data raises the odds of Federal Reserve rate cuts, which often has knock-on effects for UK-listed multinationals — many FTSE 100 firms earn the bulk of their revenue overseas, so US economic data moves London prices too.

What this means practically

If you hold a pension or ISA invested in a FTSE tracker, this week's swings are a reminder that short-term market moves are normal and rarely worth reacting to. If you're a mortgage holder hoping for imminent rate cuts, the current signal is patience rather than relief — the best current fixed mortgage rates remain above 4.4%, notably higher than the sub-4% deals available in late 2024.

International comparison

The UK's holding pattern echoes the US, where the Federal Reserve has also been cautious, though June's soft jobs numbers raise the odds of a cut later this year. The European Central Bank has moved somewhat further along its own cutting cycle given weaker eurozone growth, while the Reserve Bank of Australia has kept rates elevated for longer to manage persistent inflation — illustrating that major central banks remain broadly aligned on caution, if not perfectly in sync.

Key Numbers

• 3.75% — Bank of England Bank Rate, held since June
• 30 July 2026 — date of the next MPC decision
• 10,653 — FTSE 100's 2 July close, its highest since 17 April
• 57,000 — US jobs added in June, below expectations

Sources

• Bank of England: Bank Rate maintained at 3.75% — June 2026
• Bank of England: Upcoming MPC dates
• BBN Times: FTSE 100 Today
• Uswitch: UK mortgage rates today

Educational content only — not financial advice.