Bank of England holds interest rates at 3.75% - what it means for you

The Bank of England (BoE) has voted to hold interest rates at 3.75% today. The Monetary Policy Committee (MPC) left rates unchanged as the Bank tries to balance above target inflation with signs the economy is starting to pick up.

The vote split was as follows: 5 members voted to hold, and 4 members voted to cut the rate by 0.25%. There were no votes to increase the rate. This was a widely expected decision, as we discussed in our article on interest rates earlier this week.

Why the Bank held interest rates

Inflation is a driving factor behind the decision to hold interest rates. At 3.4%, it’s still well above the BoE’s 2% target.

The decision follows months of slow and steady rate cuts. The MPC last voted to reduce rates in December, cutting them by 0.25 percentage points. At that time, it suggested more cuts were likely this year, but only if inflation kept easing.

But early 2026 data has shown the economy growing a bit faster than expected. That’s good news for jobs and wages, but it can also mean people spend more, which can push prices up again.

The mix of improving growth with inflation staying above target makes the Bank cautious about cutting rates too soon.

What is the Monetary Policy Committee (MPC)?

The Monetary Policy Committee (MPC) is the group at the Bank of England that sets the UK’s interest rate. It meets around every six weeks to look at inflation, the economy and wages, then votes on whether to raise, cut or hold rates.

What this means for you

Here's what the decision to hold interest rates means for you.

Mortgage rates won’t change immediately.

If you’re on a tracker or variable‑rate mortgage, your payments stay the same for now; your payments will only change if there's a cut in the base rate in the future.

Fixed‑rate deals are influenced by market expectations, not today’s decision alone, so lenders may still adjust rates in the coming days, but this will only affect you if you’re looking for a new fixed-rate deal. If you're currently on a fixed-rate deal, you'll keep your rate until it runs out.

Savings rates stay stable but may slip soon.

Banks have already been trimming some savings rates in recent months. A hold may slow that trend, but it won’t stop it, so you’ll likely get about the same or less for your savings.

Loan and credit card costs stay the same.

Rates likely won’t fall until the Bank starts cutting again, so borrowing costs will likely remain at the same level for the moment.

What could happen at the next meeting?

Many economists think the Bank is still on track to cut rates this year. Today’s hold doesn’t change that. But the timing depends on upcoming data, especially inflation and wage growth.

In its minutes from its latest meeting, the MPC notes that CPI inflation is expected to fall back to closer to the Bank of England's target from April onwards; as such the risk from high inflation persisting has fallen somewhat. The MPC said that based on current evidence, the bank rate could be reduced further during future meetings.

If inflation keeps moving toward 2% and the economy doesn’t overheat, some experts believe the MPC could cut rates at the next meeting on Thursday, 18th March. If inflation sticks where it is, or rises again, the Bank may wait longer, with other experts favouring April for a cut.

Key takeaways: Bank of England holds interest rates at 3.75%

• The Bank of England has kept interest rates at 3.75%, as inflation is still above its 2% target.

• The MPC vote was split - 5 voted in favour of holding the rate, but 4 voted to cut it by 0.25%.

• Mortgage payments for people on tracker or variable rates stay the same. Fixed‑rate deals may still move based on market trends.

• Savings rates are unlikely to rise and may fall again, as banks have already been trimming returns.

• Loan and credit card costs stay the same, because borrowing won’t get cheaper until rates start falling.

• Many economists still expect rate cuts later in 2026, but the exact timing depends on upcoming inflation and wage data.