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Bank of England holds base rate at 3.75%, same 6-3 split as July
The Bank of England's Monetary Policy Committee voted 6-3 today to hold Bank Rate at 3.75%, the same split as its July meeting, a day after official figures showed CPI inflation had risen to 3.1%.
What happened
The Bank of England held Bank Rate at 3.75% today, the outcome of its scheduled 17 September Monetary Policy Committee meeting. Six members voted to hold; three, Megan Greene, Catherine Mann and Huw Pill, voted to raise Bank Rate by 0.25 percentage points to 4%, the same three members who voted the same way at the previous meeting on 30 July. The Committee's summary pointed to "protracted conflict in the Middle East" as a factor pushing crude and refined energy prices higher, which fed into yesterday's CPI inflation reading of 3.1% for August, up from 2.9% in July. The majority judged that slack in the economy and already-restrictive financial conditions gave enough headroom to hold rather than raise rates.
Why the vote split matters more than the hold itself
A hold at 3.75% was the expected outcome; it's the identical 6-3 split, rather than a widening or narrowing of the minority, that's the signal worth reading. The same three members who wanted a rise in July still wanted one today, despite inflation running hotter than it was then. That tells you the Committee's centre of gravity hasn't shifted towards them yet, but it hasn't moved away either. This meeting followed a fortnight in which the average two-year fix reached a five-month high of 5.67%, pricing that moves off swap rates and gilt yields rather than off Bank Rate directly, so today's hold does nothing to unwind that.
What it costs, worked through
Bank Rate held means no change today for anyone on a tracker or their lender's standard variable rate. Take a £180,000 repayment mortgage with 18 years left, on an SVR of 7.74% (Bank Rate plus the roughly 4-point margin typical of lenders' reversion rates). The monthly payment is about £1,480. Had the Committee voted for the rise the three dissenters wanted, taking Bank Rate to 4.00%, the same SVR would move to roughly 7.99% and the payment to about £1,510, an extra £30 a month. That didn't happen today. The risk it points to sits at the Bank's next meeting, on 5 November, particularly if the inflation data between now and then keeps climbing.
What today's hold doesn't change
A hold on Bank Rate doesn't touch fixed-rate pricing, which several lenders have already been raising through September on the back of swap rate moves that happened before today's announcement. If you're partway through applying for a fix, the rate you were quoted a week ago may no longer be on offer regardless of what the Bank did today. If you're on a tracker mortgage or sitting on your lender's standard variable rate, today's decision leaves your payment exactly where it was; the question is whether fixing now, at today's prices, beats waiting for a rate environment that the 6-3 vote suggests is still finely balanced.
What to do next
If your fixed deal has months left to run, today's decision doesn't require you to do anything. If it's ending in the next six months, it's worth getting a comparison quote now rather than waiting for the next MPC meeting on the assumption rates will fall by then; the vote split gives no strong signal either way.
Frequently asked questions
Does today's hold mean my mortgage payment is safe?
Only if you're on a tracker or standard variable rate, and only for now. A hold means Bank Rate didn't move today, so tracker and SVR payments stay exactly where they were. It says nothing about the next meeting, on 5 November, or about fixed-rate pricing, which moves separately off swap rates.
Why did three MPC members vote to raise rates when inflation is already above target?
Megan Greene, Catherine Mann and Huw Pill voted for a 0.25 percentage point rise to 4%, arguing the case that above-target inflation, running at 3.1% in August, warrants tighter policy now rather than waiting. The majority of six judged that existing restrictive conditions and slack elsewhere in the economy were doing enough of that work already, so a hold at 3.75% won.
Will fixed mortgage rates fall now that the Bank held rates?
Not automatically. Fixed-rate pricing tracks swap rates and gilt yields, which price in expectations of future Bank Rate moves rather than today's decision alone. Several lenders raised fixed rates through the two weeks before this meeting on the back of those expectations; a hold on the day doesn't reverse pricing that was already set.
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Examples are illustrative and rounded. Your own mortgage offer and lender confirm your actual figures and dates. This is information, not financial advice. For advice on your circumstances, speak to a mortgage adviser regulated by the FCA.