Bank Rate held at 3.75% as inflation risks remain

What happened?

The Bank of England's Monetary Policy Committee held Bank Rate at 3.75% at its meeting ending on 29 July 2026. The decision was published on 30 July 2026.

The vote was split 6–3. Six members voted to keep rates where they are, while three voted to raise Bank Rate by 0.25 percentage points to 4%.

The Bank said inflation has fallen to 2.6% since the previous meeting, but it expects inflation to rise later this year as higher energy prices continue to feed through. It said the main uncertainty comes from events in the Middle East and their effect on oil, gas and wider energy prices.

The MPC said there is little evidence so far of strong second-round effects in wages and prices, but it remains ready to act if needed to keep inflation on track to return sustainably to the 2% target.

Why has this happened?

The Bank held rates because it is balancing two forces. On one side, inflation has fallen and there are signs of underlying disinflation, with a softer labour market and weaker domestic inflation pressures. On the other, energy prices remain volatile and higher than before the conflict, which could push inflation back up later this year.

What really matters is not just today's hold, but the tone behind it. The Bank says risks to the inflation outlook are tilted to the upside, and three MPC members wanted to raise rates now as a precaution. That tells you the Bank is not declaring victory on inflation.

For the mortgage market, this matters because lenders do not price purely off today's Base Rate. They also react to expectations, risks and funding conditions. A hold removes the shock of an immediate rise, but it does not automatically mean mortgage rates will fall.

What does it mean?

For borrowers, today's decision is more about stability than relief. If you already have a mortgage, your payment will only change straight away if you are on a tracker or standard variable rate linked to Bank Rate. If you are on a fixed rate, this decision does not change your payment today.

If you need a new deal, the message is to stay realistic. The Bank thinks inflation risks are still skewed upwards because of energy prices, even though underlying inflation has been easing. That means lenders may continue to price cautiously until there is clearer evidence that inflation will keep moving back towards target without fresh pressure.

So the practical takeaway is simple: do not base your plans on quick rate cuts or a sudden wave of cheaper mortgages. Build your next move around what is affordable now, what your deadline is, and how much flexibility you need if the market stays choppy.

Frequently asked questions

What is the Bank of England base rate now?

Bank Rate was held at 3.75% at the July 2026 meeting.

Will my mortgage payment go down because rates were held?

Not automatically. If you are on a fixed rate, your payment stays the same today. If you are on a tracker or some standard variable rates, your payment only changes when Bank Rate changes, and today it was held.

Does a base rate hold mean mortgage rates will fall?

No. A hold can help stability, but lenders also look at inflation risks, market expectations and funding costs. The Bank's message was still cautious, so cheaper deals are not guaranteed.

Should I wait to remortgage after this decision?

That depends on your deadline, but waiting carries risk if your current deal is ending soon. The Bank held rates, but three MPC members voted for an increase, so it is sensible to review your options early.

Why did the Bank hold rates if inflation is still above 2%?

The Bank said inflation has fallen to 2.6% and there are signs of underlying disinflation. But it also expects inflation to rise later this year because of higher energy prices, so it chose to hold while watching for stronger knock-on effects in wages and prices.

What should first-time buyers do after a base rate hold?

Focus on affordability rather than headlines. Check your deposit, loan to value, fees and monthly payment, and speak to a broker before assuming deals will improve quickly.