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 3.1% in the 12 months to August 2026 – up from July's figure of 2.9% and still above the Bank's target.

Why the base rate was held

On Thursday 17 September, the Bank's Monetary Policy Committee (MPC), which determines the rate, voted six to three to hold the base rate. Three members voted to increase the rate by 0.25 percentage points, to 4%.

The MPC said: "Protracted conflict in the Middle East has contributed to further increases in crude and refined energy prices since the previous meeting, which remain more volatile and higher than pre-conflict. UK CPI inflation increased to 3.1% in August and is likely to rise further over coming quarters.

"Monetary policy is being set to ensure inflation comes down to 2% sustainably as the economy adjusts to the energy shock. The policy stance required to achieve this will depend on the scale and duration of the shock and how it propagates through the economy."

Hal Cook, senior investment analyst, Hargreaves Lansdown, said: "The Bank's decision to hold was widely expected, despite headline inflation for August ticking up to 3.1%. But the Bank faces a tricky few months ahead.

"Headline inflation has risen and is likely to rise further from here, with October's energy price cap changes expected to add upward pressure."

Martin Lewis: 'The mood music is definitely upward now'

Following the announcement, MoneySavingExpert.com (MSE) founder Martin Lewis gave his response on X:

'Several rate rises could be in the pipeline' despite the hold

Sarah Coles, head of personal finance at AJ Bell, said: "Don't get comfortable. The Bank of England has held rates for the sixth consecutive month, but the markets are increasingly convinced that several rate rises could be in the pipeline. The MPC may have pressed pause on rates, but it's expected to fast forward from here.

"The Bank has chosen not to move, partly because wage rises are still relatively modest. However, the pressure is building. As a result, the market now expects the first hike in November, a total of three by March and as many as five by July. The market has been wrong before – many times – so none of this is nailed on. However, it will already be having an impact on savings and mortgages."

Nicholas Mendes, of mortgage broker John Charcol, said: "The hold does not take a future rate rise off the table. The next few inflation and wage readings will be important. If higher energy costs start feeding into wages, services inflation and wider price-setting, the case for a rate rise later this year will strengthen.

"If the Bank does move before the end of 2026, November is the first obvious window, with December also a possibility if the Committee wants more time."

A hold doesn't mean mortgage rates will fall, experts say

Ian Futcher, financial planner at wealth management firm Quilter, also gave his opinion to MSE: "For mortgage borrowers, the key message is not to assume that a hold automatically translates into cheaper borrowing tomorrow.

"Mortgage rates are influenced not only by the Bank Rate but also by market expectations and swap rates, which have remained volatile amid ongoing inflation concerns.

"Homeowners coming to the end of a fixed-rate deal should therefore review their options early rather than sitting on their hands waiting for cheaper deals to arrive."

Sajni Shah, money expert at Compare the Market, said: "For mortgage borrowers, the announcement means there is no immediate change to repayments. However, more than one million homeowners are coming to the end of two-year fixed-rate deals this year and Compare the Market's latest analysis found they could face an increase of £283 a month if they move onto the current average standard variable rate.

"With switching to a new two-year fixed deal potentially saving these borrowers up to £286 a month, anyone approaching the end of their current deal may want to consider reviewing their options early and shopping around for a competitive rate."

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 both start from around 4.6% to 4.7%. So if you're on an SVR, you should consider switching to a new deal now – see our Cheap mortgage finding guide.

Even with interest rates on fixed deals having increased in recent weeks, SVRs are still substantially more expensive.

Savings rates remain largely unchanged – but always check your interest

Since the base rate was last held at 3.75% in July, 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 4.5% from Chase – 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, Kent Reliance pays 5.16% for three years, while Shawbrook Bank and GB Bank pay 5.25% for five years. 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.