February 5th, 2026
The Bank of England has announced today that the UK base interest rate will be held at 3.75%, leaving it unchanged after December’s cut.
This decision reflects the Bank’s cautious approach as it monitors recent inflation data and wider economic conditions. While inflation has eased compared to earlier in 2025, it remains sensitive to global pressures, prompting policymakers to pause rather than move rates again so soon.
For homeowners, buyers and savers, this announcement is less about immediate change and more about stability. A held base rate provides clarity, and that certainty can be useful when planning your next financial move.
For people with mortgages
Tracker and variable-rate mortgage holders will see no change to their monthly payments following today’s announcement. Fixed-rate borrowers won’t be affected immediately either, although expectations about the direction of interest rates continue to influence how lenders price new mortgage deals.
Despite the base rate being held, a number of lenders reduced fixed-rate products earlier this year. These changes were largely driven by increased competition and improving market sentiment, rather than the Bank of England’s decision itself. The result has been a more competitive mortgage market for borrowers reviewing their options.
For anyone coming to the end of a mortgage deal, this period of stability offers a useful window to take stock. Reviewing your options now — and potentially securing a fixed rate while pricing remains favourable — could help provide peace of mind and reduce exposure to future rate movements.
For those looking to buy
For prospective buyers, today’s announcement brings continuity. With the base rate held at 3.75%, borrowing costs are still higher than the ultra-low levels of previous years — but conditions are notably more favourable than they were this time last year.
Competition between lenders has increased, and mortgage rates have softened as expectations of sharp rate rises have faded. This means buyers who are well prepared — with a clear understanding of their borrowing power — may find more choice and flexibility in the market.
If you’re thinking about buying in the coming months, speaking to a mortgage advisor now can help you understand what’s available and put you in a strong position ahead of any future base rate changes.
For savers
For savers, the decision to hold rates may feel underwhelming, but it does provide reassurance. Savings rates are unlikely to rise further in the short term, yet they remain stronger than much of the past decade.
That said, with inflation still above the Bank’s long-term target, real returns remain under pressure. It’s worth checking whether your savings are earning a competitive rate — particularly if your money is sitting in an easy-access account that may no longer be keeping pace with the market.
The bigger picture
Today’s announcement confirms the Bank of England is taking a measured approach, holding rates steady while it looks for clearer signs that inflation is on a sustainable downward path.
For borrowers and buyers, this period of stability offers a chance to plan ahead rather than react to sudden changes. Reviewing your mortgage or future plans now can help ensure you’re well positioned for what comes next.
To understand what today’s decision means for you, our CMME mortgage advisors are here to help:
Your home may be repossessed if you do not keep up repayments on your mortgage.