Bank of England Holds Interest Rate at 3.75% (February 2026)

The February Rate Decision

The Bank of England's Monetary Policy Committee (MPC) voted by a narrow majority of 5-4 to leave the base interest rate unchanged at 3.75% in February, following higher-than-expected inflation figures released in January.

When inflation is rising, central banks will typically either hold or increase interest rates to cool spending and encourage saving. The Bank of England has a 2% inflation target, and while inflation has moved closer to this level over the past year, progress has been uneven.

Steeper food prices and higher airfares pushed the Consumer Prices Index (CPI) up to 3.4% in December, compared with 3.2% in November. This increase dampened expectations of a February rate cut and reinforced the MPC's cautious approach.

What Happens Next?

The very tight 5-4 vote — with four members preferring an immediate cut — suggests that a rate reduction in March remains a real possibility, particularly if January's inflation data (released since the vote) shows further easing.

However, there are no guarantees. Some analysts are questioning whether there might be only one rate cut this year. If inflation proves more persistent than expected — particularly if UK wage growth remains strong — policymakers may delay further reductions.

Mortgage Rates Are Nudging Up

Following an increase in swap rates, more lenders including NatWest and Nationwide have raised their mortgage rates over the past couple of weeks. As a result, it's likely that other lenders will follow suit in the short term.

If you're coming to the end of your mortgage deal in the next six months, it's worth reviewing your remortgage options in good time. Most lenders allow you to secure a new deal 3-4 months ahead of time, and in some cases up to 6 months in advance.

This means you can lock in a rate now as a safety net, but review your options again closer to completion if rates start to ease back. There's no obligation to proceed with the secured rate if a better deal becomes available.

Our fee-free mortgage advisors can help you compare deals and find the best option for your circumstances — whether you're remortgaging, buying your first home, or moving.