Bank of England Holds Rates at 3.75% — What It Means for Your Mortgage and Savings

The Bank of England's Monetary Policy Committee voted 7–2 to hold Bank Rate at 3.75% at its meeting ending 17 June 2026, with the two dissenters pushing for a rise to 4%. The next decision lands on 30 July 2026, and markets currently expect another hold, though economists remain split on the direction of travel for the rest of the year.

Why the split vote matters

A 7–2 vote with dissenters favouring a rise — not a cut — signals that some MPC members see inflation risk as the bigger threat right now, not a weakening economy. That's consistent with reporting that inflation is running higher than expected and is forecast to climb further in the second half of 2026, partly due to volatile global energy prices linked to Middle East tensions.

What this means for mortgages

With Bank Rate parked at 3.75%, the average two-year fixed mortgage rate sits at 5.68% and the average five-year fix at 5.63%, according to Uswitch. The cheapest deals are considerably better: HSBC's best two-year fix comes in at 4.44% and its five-year equivalent at 4.51%, while Halifax's lowest tracker is 3.96%.

If you're coming off a fixed deal in the next six months, the practical takeaway is that rates are unlikely to fall meaningfully before your renewal — and could rise if the MPC's hawks gain ground. It's worth comparing deals via Which?'s mortgage rate tracker 3-6 months ahead of your current deal ending, since most lenders let you lock in a rate that far in advance.

What this means for savers

A held rate is good news for savers: the top easy access, notice and fixed-rate accounts currently pay between 4.38% and 8.00% AER, according to Moneyfacts, with regular saver accounts topping the table. If the Bank does eventually cut rates, these headline numbers will fall, so locking into a fixed-rate bond now protects today's rate for its term.

International comparison

The UK's 3.75% base rate sits above the European Central Bank's deposit rate, which has been closer to 2% through most of 2026, but below the US Federal Reserve's target range, which has hovered around 4.25–4.5%. Australia's Reserve Bank cash rate has similarly sat in the mid-3% range — so UK borrowing costs are broadly in line with peer economies rather than an outlier.

Key Numbers

• Bank Rate held at 3.75%
• MPC vote: 7–2 to hold
• Average 2-year fix: 5.68%
• Average 5-year fix: 5.63%
• Top savings rates: 4.38%–8.00% AER
• Next MPC decision: 30 July 2026

Sources

• Bank of England: June 2026 Monetary Policy Summary
• Bank of England: upcoming MPC dates
• Uswitch: UK mortgage rates today
• Which?: best mortgage rates and deals
• Moneyfacts: highest UK savings rates

Educational content only — not financial advice.