Base rate held AGAIN at 3.75% – here's what it means for you and when it might change

The base rate is used by the central bank to charge other banks and lenders when they borrow money – so it influences what borrowers pay and what savers earn.

It's also used by the Bank of England as a tool to control inflation (the rate at which prices rise). The Bank has a target – set by the Government – of 2% for the Consumer Prices Index (CPI) measure of inflation. The latest figures show that CPI inflation was 2.6% in the 12 months to June 2026 – down from May's figure at 2.8% but still above the Bank's target.

Why the base rate was held

In the decision announced today, Thursday 30 July, the Bank's Monetary Policy Committee (MPC), which determines the rate, voted six to three to maintain the base rate at 3.75%. Three members voted to increase the base rate by 0.25 percentage points, to 4%.

The MPC said: "Taking all of the risks into account, the MPC judged that the risk of strong inflationary pressures was greater than the risk of weak inflationary pressures, although there remained a high degree of uncertainty around the outlook."

It added: "In considering the appropriate level for Bank Rate, members noted that financial conditions had tightened materially compared with prior to the conflict, which had increased financing costs faced by households and firms. Members discussed the extent to which the tightening in financial conditions reflected ongoing uncertainty and a perception from market participants that risks to Bank Rate were skewed to the upside."

Nicholas Mendes, of mortgage broker John Charcol, gave his view on the decision to MoneySavingExpert.com: "Inflation eased to 2.6% in June, down from 2.8% in May and below what economists had expected, with the closely watched services inflation figure, which strips out one off effects like fuel and airfares, also easing to 3.6%. That is a reading that supports holding rates rather than raising them.

"There is also a fiscal argument for patience. With a new Prime Minister and Chancellor only weeks into the job and an autumn Budget still to come, the Bank has every reason to wait for clarity on tax and spending plans before making a further move in either direction. Holding keeps that option open."

Could the base rate rise this year?

David Hollingworth, associate director at broker L&C Mortgages said: "In the early part of the year, it looked as though rates would drift down and mortgage rates were dropping in anticipation of more base rate cuts to come.

"The conflict in the Middle East has changed that outlook and, although borrowers will be pleased to see the base rate held, the question looks increasingly likely to be if or even when rates will rise, as things stand.

"Financial markets are expecting there to be increased upward pressure on interest rates, which could see base rate rising once or even twice. Lenders have already had to push fixed rates back up and continue to apply price hikes as fixed rate funding costs have increased."

Mortgage rates have already risen despite the hold

Adam French, head of consumer finance at comparison site Moneyfacts, said: "Several major lenders have already increased mortgage rates in recent weeks despite today's widely expected hold in the base rate at 3.75%. This upward shift is being driven by the growing expectation of future base rate hikes largely due to the volatile nature of the conflict in the Middle East."

Mr Mendes commented: "Two- and five-year swap rates are up by roughly 0.22 to 0.23 of a percentage point over the past month and have only just begun to ease as the ceasefire and Hormuz diplomacy took hold. Anyone with a deal ending in the next six months should secure a rate now rather than wait for a fuller reversal."

Mr Hollingworth added: "Those looking at fixed rates should not take their time in the current climate as rates continue to rise. Locking in a deal will secure the rate but still allow for another review before completion, in case the market does ease again."

On your lender's SVR? You can likely save £1,000s with a new deal

A standard variable rate (SVR) is the rate you pay once your current mortgage deal comes to an end. SVRs have a variable rate of interest, which means the rate can change at any time.

SVRs are normally far more expensive than the best fixed or tracker deals – right now, a typical SVR is currently around 6% to 7%, but the top two- and five-year fixes start from circa 4.3% and 4.4% respectively. So if you're on an SVR, you should consider switching to a new deal now – see our Cheap mortgage finding guide.

Savings rates remain largely unchanged– but always check your interest

Since the base rate was last held at 3.75% in June, the top savings rates available on easy-access accounts have remained roughly the same – you can still get 4%-plus with the top accounts.

However it's still crucial to check your interest now. Millions are on pants rates, and can easily and simply move their money to where it pays more. If you're on a fix, diarise to act before it ends.

Currently, the benchmark easy-access rate is from Tembo, which pays 4.5% – though it's possible to get up to 5% elsewhere.

If you're worried about rates dropping and can lock money away, you might want to consider a fixed deal, Investec and Atom Bank both pay 5% for three-years and five-years respectively. Alternatively, if you want a shorter fix and prefer to save with a big name, MBNA (part of Lloyds) pays 4.85% for one year.

For full info and lots more options, see our Top savings accounts guide.