What the Bank of England decided — and why.
On Thursday 18 June 2026, the Bank of England’s Monetary Policy Committee (MPC) voted to hold the base rate at 3.75% for the fourth consecutive time. The decision was widely expected by markets and mortgage industry commentators.
The MPC is a nine-member committee that meets eight times per year to decide what level of interest rates is needed to keep UK inflation at its 2% government-set target. Yesterday’s decision was not unanimous.
MPC vote — 18 June 2026
Voted to hold (7)
- Andrew Bailey (Governor)
- Sarah Breeden
- Clare Lombardelli
- Dave Ramsden
- Alan Taylor
- Catherine Mann
- Swati Dhingra
Voted to raise (2)
- Huw Pill (Chief Economist)
- Megan Greene
Why did the MPC hold rather than cut or raise?
The MPC cited several key reasons for the hold decision:
- Inflation at 2.8% — still above the 2% target (May 2026 CPI data). The committee needs sustained evidence that inflation is returning durably to target before cutting.
- Middle East conflict impact — the war has disrupted oil and gas supply chains, pushing energy prices higher than expected. The MPC noted that global energy prices have fallen since the previous meeting but remain elevated.
- Cautious ‘wait and see’ approach — the majority of the committee prefers to monitor further data before moving rates in either direction.
- Economic uncertainty — with the UK–Iran peace deal developments still fluid, the committee judged it too soon to ease policy further.
The dissenting voices
Huw Pill and Megan Greene both voted to raise rates to 4%, citing the risk that second-round inflationary effects — where higher energy costs feed through into wages and services prices — could keep inflation elevated for longer than the committee’s central forecast assumes.
Bank of England base rate — last 2 years.
To understand where rates are now, it helps to see how we got here. The chart below shows every BOE rate decision from June 2024 to June 2026.
All MPC decisions plotted. Data source: Bank of England. Green points = rate cuts; gold point = latest hold. The rate has been held at 3.75% since December 2025.
Every rate change since June 2024.
Here is a full timeline of every MPC decision over the past two years — from the start of the cutting cycle to today’s hold.
-
May 2024
Rate held at 5.25%
The MPC held for the seventh consecutive meeting. Inflation had fallen but remained above target. The committee began signalling that cuts could follow.
-
August 2024
First cut — to 5.00%
The first rate cut since March 2020. The MPC voted 5–4 to reduce by 0.25%. UK inflation had fallen to 2.0% — at target — giving the committee confidence to begin easing.
-
September 2024
Rate held at 5.00%
The committee paused after August’s cut, opting to assess incoming data before moving again.
-
November 2024
Cut to 4.75%
Second cut of 2024. Slowing wage growth and weaker GDP data supported the decision to ease further.
-
December 2024
Rate held at 4.75%
A pause over the festive period, with the committee watching services inflation and wage data closely.
-
February 2025
Cut to 4.50%
The cutting cycle resumed. The MPC cut by 0.25% as inflation continued its downward trend.
-
March 2025
Rate held at 4.50%
Another pause. Global trade uncertainty — including US tariff concerns — added caution to the committee’s thinking.
-
May 2025
Cut to 4.25%
Widely expected cut. Labour market data softened and inflation was on track toward target.
-
August 2025
Cut to 4.00%
The fifth cut of the cycle. UK unemployment had risen to 5.1% and the economy had shown signs of contraction, giving the MPC room to cut.
-
September / October / November 2025
Rate held at 4.00% (×3)
Three consecutive holds as the Middle East conflict broke out, pushing energy prices higher and threatening to re-accelerate inflation. The MPC adopted a cautious stance.
-
December 2025 — last rate change
Cut to 3.75%
The sixth — and most recent — cut, bringing the base rate to 3.75%. Inflation had fallen to 3.2% in November (below forecast), giving the MPC a narrow window to cut. The vote was 5–4 — the slimmest majority of the entire cycle.
-
February / March / April / June 2026
Rate held at 3.75% (×4) — including yesterday
Four consecutive holds as inflation crept back above target (2.8% in May 2026) due to elevated energy prices. The June 2026 hold was backed by 7 members, with 2 voting to raise.
What this means for UK mortgage rates.
The base rate and mortgage rates are related — but they don’t move in lockstep. Here’s how yesterday’s decision affects different types of borrowers.
How mortgage rates are actually set
Fixed rate mortgages — which the vast majority of UK borrowers use — are priced primarily off swap rates, not the base rate. Swap rates reflect what financial markets expect interest rates to be in the future. This means fixed mortgage rates can move even when the base rate stays still.
The swap rate relationship
Think of swap rates as the mortgage market’s own forecasting tool. If markets believe rates will fall, swap rates drop, and lenders can offer cheaper fixed deals — even before the Bank of England actually cuts. This is why fixed mortgage rates started falling in early 2026 even while the base rate was being held.
| Mortgage type | Impact of yesterday’s hold | Outlook |
|---|---|---|
| Tracker mortgage | No change. Tracker rates are directly linked to the base rate, so they stay at their current level. | Stable |
| Standard Variable Rate (SVR) | No change expected. Lenders may adjust SVRs independently but are unlikely to move given the hold. | Stable |
| 2-year fixed rate | Not directly impacted. Swap rates have been easing slightly, pulling 2-yr fixes lower. Best rates currently around 4.1%. | Drifting lower |
| 5-year fixed rate | Same — tied to swap rates. 5-yr fixes now around 3.9% from the best lenders. Have fallen from ~4.5%+ in late 2025. | Drifting lower |
| 10-year fixed rate | Longer-term fixes remain slightly elevated. Some borrowers are locking in to protect against a possible rate hike later in 2026. | Uncertain |
What happens next? The rate outlook for 2026–2027.
The big question is whether rates will fall further from 3.75% — or whether the two dissenting votes in yesterday’s meeting signal something more worrying. Here are the three scenarios the market is currently pricing:
Rates cut to 3.25–3.5% by end of 2026
If the Middle East situation stabilises and energy prices fall back, inflation could return to 2% by autumn. This would give the MPC room for 1–2 more cuts before year end.
Rates held at 3.75% through 2026, cut in spring 2027
The most widely held market view. The MPC keeps rates on hold for the rest of 2026 while monitoring inflation, then begins cutting again in Q1 or Q2 2027 as energy price pressures fade.
Rates raised to 4%+ in H2 2026
If energy prices spike again, or second-round inflation effects materialise (wages rising faster), the two hawks on the MPC could pick up more votes. Deutsche Bank flags this as a non-trivial risk.
What the experts are saying
Deutsche Bank’s models still see rate cuts returning in spring 2027, expecting rates to stay at 3.75% for the rest of 2026. The HomeOwners Alliance’s mortgage expert Sarah Tucker noted that the hold “will be welcomed by homeowners on tracker mortgages who will see no changes to their repayments, and also by those looking to take out a fixed rate mortgage.” Markets are not pricing in a hike as the most likely outcome — but they’re no longer ruling one out either.
What should mortgage borrowers do right now?
The right move depends on your situation, but here is the general picture:
| Your situation | What to consider |
|---|---|
| On a tracker or SVR right now | Your payments are unchanged after yesterday’s hold. If you’re on an SVR (which is typically much higher than available fixed rates), now is a good time to speak to a broker about fixing. |
| Fixed deal ending in next 3–6 months | You can typically lock in a new rate up to 6 months before your current deal expires. With 5-yr fixed rates around 3.9%, locking in now protects against any possible rate hike later in 2026. |
| Looking to buy your first home | Fixed mortgage rates have been falling and are significantly below their late-2025 peak. Affordability is improving. Getting a Mortgage in Principle now puts you in a strong position. |
| Considering whether to fix or track | Given the 20% chance of a rate hike in the bear scenario, a 5-year fix offers valuable certainty at near-historic reasonable levels. A whole-of-market broker can model both options for your specific numbers. |
| Remortgaging later in 2026 | Watch the 30 July MPC meeting closely. If language shifts more hawkish, locking in before that meeting could be wise. A broker can set up rate alerts on your behalf. |
Your questions answered.
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Current BOE base rate — 3.75% · Held 18 June 2026
- Last changed
- Dec 2025
- Last change
- ▼ Cut (−0.25%)
- MPC vote
- 7 hold, 2 hike
- UK inflation (May)
- 2.8% CPI
- Next meeting
- 30 Jul 2026
- Peak (Aug 2023)
- 5.25%
Current mortgage rates
- Best 2-yr fixed
- from ~4.1%
- Best 5-yr fixed
- from ~3.9%
- Typical tracker
- ~4.0–4.5%
- Typical SVR
- ~7–8%
- Rate peak (Aug ’23)
- 5.25%
- Total cuts since peak
- −1.50%
Important information
This article is for informational purposes only and does not constitute financial advice. Mortgage rate figures are indicative as at June 2026 and change daily. MPC vote details and macroeconomic data sourced from publicly available Bank of England statements and financial news reporting. Always speak to a qualified, FCA-regulated mortgage advisor before making any decisions. Mortgage Locator is an introducer service.
Published 19 June 2026 by the Mortgage Locator team, the day after the BOE decision. Updated regularly following each MPC meeting. Rate figures correct as at date of publication.