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Bank of England holds base rate at 4% ahead of "economic juggernaut heading our way"

ended 06. November 2025

THE base rate has been held at 4% by the Bank of England (BoE) as experts warn of an "economic juggernaut heading our way" in the Budget.

The Monetary Policy Committee voted by a majority of 5–4 to maintain the Bank Rate at 4%, the Bank of England announced.

Four members voted to reduce the Bank Rate by 0.25 percentage points, to 3.75%.

Financial experts said the Bank of England was holding ahead of the crucial Budget later this month.

Chancellor Rachel Reeves will be looking to bring inflation, currently at 3.8%, down nearer to its target of 2%.

Experts described it as an “economic juggernaut heading our way”.

Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said: “No real surprises on the hold given that inflation is still almost double its target. The Bank of England playing it cautious may be a wise move given the economic juggernaut heading our way later this month in the form of the Budget.”

Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, said the Bank's hold was not a surprise.

He added: "The Bank of England's rate hold was as predictable as rain in April. With inflation stubbornly sticky, Governor Bailey is clearly playing the long game, perhaps masterfully ignoring Rachel Reeves in the past few days. 

“The timing screams political caution: why inject rate-cut stimulus just before the Budget drops? It's fiscal indigestion waiting to happen. By staying put, the Bank of England projects a facade of unflappable independence.”

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said a rate cut is now expected later this year.

She continued: “The vote, as expected, was close, which could bode well for a cut at the next meeting, assuming inflation plays ball. Of course, there's the small matter of the Budget before then, which has the potential to send markets into meltdown.”

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, agreed that inflation figures are important going forward.

He said: "With inflation miles away from where it's needed to be, expecting the Bank of England to cut rates at this meeting was wishful thinking. 

“Hopefully, the Budget includes measures to keep inflation at bay, especially on energy costs, and we could see deeper cuts next year.”

Anita Wright, Chartered Financial Planner at Ribble Wealth Management, agreed, adding: "Inflation is still the enemy. Yes, today’s ‘no change’ print keeps the optics tidy, but with wages cooling is not victory; it’s a slow squeeze. Hold rates here and you prolong the pain (higher mortgage resets, tighter credit, anaemic capital expenditure). 

“Cut too early and you entrench ‘expensive normal’ negative real yields doing quiet balance-sheet repair for the state while households tread water. That’s the trade-off, and it is not a growth strategy.”

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said the vote was very close.

He added: "Andrew Bailey and the Bank of England blinked today, voting by the narrowest of margins with Governor Bailey having the casting vote (5-4) to keep UK interest rates unchanged at 4% less than three weeks before the next Budget. 

“Regardless of the dire state of the economy, Bailey simply did not want to risk being accused of political favouritism. The initial reaction in the markets is a big shrug of the shoulders with little change in the value of the Pound in the currency markets and the Footsie fractionally down on the day.”

Michelle Lawson, Director at Fareham-based Lawson Financial, agreed, adding: "Disappointing but expected hold today. A close call with 5-4 in favour of the hold so maybe there will be a Christmas cut on 18th December. 

“Andrew Bailey still appears to be in favour of further cuts but didn't have the courage this time around. Let's see what happens with the Budget and see if this is enough to make them move.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said the hold will be felt by everyone.

She continued: "The Bank’s taken a breather, but borrowers can’t. Holding at 4% feels less like calm and more like a holding pattern. The markets might sigh in relief, but mortgage holders are still gasping. 

“We’re told stability is back, yet the strain on households hasn’t shifted. The only thing moving faster than inflation now is frustration and fear. If the Bank’s waiting for perfect timing, it might find the public’s patience has already expired.”

Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management, said the next Bank's meeting in December will be crucial.

He added: "There is plenty of logic to cutting the base rate as the economy is stalling. But with another tax raising Budget coming later this month, would it even really have an effect? 

“The sensible thing to do is to wait and see and then assess afterwards. The next meeting on 18th December gives a chance to do that.”

Eamonn Prendergast, Chartered Financial Adviser at Bromley-based Palantir Financial Planning Ltd, said the Bank’s pause was no surprise but the close vote shows the tide is turning”.

He continued: “Holding at 4% feels like a holding pattern before the Chancellor’s Budget, but a 5–4 split tells us rate cuts aren’t far away. With inflation easing and growth faltering, the Bank is signalling patience, not paralysis. 

“Hard-working families and businesses still feel the strain, so a small early-2026 cut now looks increasingly likely — the question is whether policymakers will wait too long to give the economy some breathing space.”

Prem Raja, Head of Trading Floor at Currencies 4 You, said the Pound is currently stable after the announcement.

He added: "The BoE kept interest rates on hold today at 4%, in line with expectations. With 4 members voting for a cut, understandably, it seems the BoE are in wait-and-see mode with the upcoming Budget in a few weeks. 

“Sterling exchange rates have been relatively stable since the announcement, as it wasn't much of a surprise, and traders are now betting on a December rate cut of 25 bps from the BoE.”

 


 


 

Responses asap.

17 responses from the Newspage community

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Editor
Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
No real surprises on the hold given that inflation is still almost double its target. The Bank of England playing it cautious may be a wise move given the economic juggernaut heading our way later this month in the form of the Budget.
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Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
The vote, as expected, was close, which could bode well for a cut at the next meeting, assuming inflation plays ball. Of course, there's the small matter of the Budget before then, which has the potential to send markets into meltdown.
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Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
The Bank of England's rate hold was as predictable as rain in April. With inflation stubbornly sticky, Governor Bailey is clearly playing the long game, perhaps masterfully ignoring Rachel Reeves in the past few days. The timing screams political caution: why inject rate-cut stimulus just before the Budget drops? It's fiscal indigestion waiting to happen. By staying put, the Bank of England projects a facade of unflappable independence. Ironically, this inaction offers markets more clarity than pre-Budget hype. The present reality of the interest rate is fixed, giving sterling a brief moment of solid ground. While the government plots future tax hikes, the BoE simply states the present cost of money. For now, the Bank’s stubborn consistency offers more reliable value than the government’s forthcoming fiscal promises.
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Riz Malik
Independent Financial Adviser at R3 Wealth
With inflation miles away from where it's needed to be, expecting the Bank of England to cut rates at this meeting was wishful thinking. Hopefully, the Budget includes measures to keep inflation at bay, especially on energy costs, and we could see deeper cuts next year.
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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
Bailey and the Bank of England blinked today, voting by the narrowest of margins with Governor Bailey having the casting vote (5-4) to keep UK interest rates unchanged at 4% less than three weeks before the next Budget. Regardless of the dire state of the economy, Bailey simply did not want to risk being accused of political favouritism. The initial reaction in the markets is a big shrug of the shoulders with little change in the value of the Pound in the currency markets and the Footsie fractionally down on the day.
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Editor
Rohit Kohli
Director at The Mortgage Stop
It was always going to be a hold. Inflation’s still too high for the Bank of England to risk cutting, no matter how much pressure comes from Westminster. The Chancellor’s speech earlier this week felt more like pleading than policy, but the Bank isn’t in the mood to play politics. What happens at Christmas will depend entirely on how dire the budget looks on the 26th. If the tax hikes are as ugly as expected, the Bank might have to react - but otherwise, I don’t see base rate moving before spring.
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Aaron Strutt
Product and Communications Director at Trinity Financial
The economic news coming out of the UK is not particularly good at the moment, especially with the negative tones coming from the Chancellor during her last press conference. As a result, this means that the Bank of England may well be forced to cut the base rate a few times to try and revive the economy.
I suspect the Bank of England Monetary Policy Committee will lower the base rate next month as we've seen them do in the past - just before Christmas.
Mortgage rates have been coming down over the last few weeks and rates are much more competitively priced than they were. Nationwide has just launched a 3.64% two-year fixed rate, which is the cheapest residential fixed rate since 2022. This is great news for borrowers, especially as there are so many homeowners coming up to remortgage over the next year.
I expect the base rate will come down next year and be closer to 3.5% unless there is a huge economic boost to our economy meaning the MPC do not need to act, but that seems unlikely
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Justin Moy
Managing Director at EHF Mortgages
As expected, with inflation still buzzing at the higher end of expectations, it was always going to be a tough decision to cut, but the 5-4 vote showed how close the BofE are to pulling the trigger, and that will give mortgage holders some hope for further rate cuts between now and the new year. The budget is effectively holding the economy to ransom at the moment, and the Bank of England will probably end up trying to pacify the market, so don't rule out a rate cut outside of the normal scheduled meetings..
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Editor
Michelle Lawson
Director at Lawson Financial
Disappointing but expected hold today. A close call with 5-4 in favour of the hold so maybe there will be a Christmas cut on 18th December. Andrew Bailey still appears to be in favour of further cuts but didn't have the courage this time around. Let's see what happens with the Budget and see if this is enough to make them move.
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Editor
Jack Tutton
Director at SJ Mortgages
We must be nailed on now for a cut in the base rate come December's meeting, such a close vote to hold the base rate at 4% would not have been predicted. Whilst it was expected for the base rate to be held in todays announcement, mainly due to the fact that inflation is still well above their target, a vote of 5-4 will have implications in the financial markets and hopefully see the cost of borrowing fall further with another cut in the base rate being factored in. All this is good news for mortgage holders as this should help reduce mortgage rates further, that is unless the Chancellor decides otherwise in her budget at the end of the month.
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Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
There is plenty of logic to cutting the base rate as the economy is stalling. But with another tax raising budget coming later this month, would it even really have an effect? The sensible thing to do is to wait and see and then assess afterwards. The next meeting on 18th December gives a chance to do that.
Copy

Editor
Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
The Bank’s pause was no surprise but the close vote shows the tide is turning.”
“Holding at 4% feels like a holding pattern before the Chancellor’s Budget, but a 5–4 split tells us rate cuts aren’t far away. With inflation easing and growth faltering, the Bank is signalling patience, not paralysis. Hard-working families and businesses still feel the strain, so a small early-2026 cut now looks increasingly likely — the question is whether policymakers will wait too long to give the economy some breathing space.
Copy

Editor
Anita Wright
Chartered Financial Planner at Ribble Wealth Management
Inflation is still the enemy. Yes, today’s “no change” print keeps the optics tidy, but with wages cooling is not victory; it’s a slow squeeze. Hold rates here and you prolong the pain (higher mortgage resets, tighter credit, anaemic capital expenditure). Cut too early and you entrench “expensive normal” negative real yields doing quiet balance-sheet repair for the state while households tread water. That’s the trade-off, and it is not a growth strategy.
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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Andrew Bailey might have ousted Reeves with his decision to hold rates, making it more likely income tax will rise and a backlash imminent towards the struggling chancellor. His decision means the cost of government borrowing will not fall before the budget, making it harder to balance the books without breaking a manifesto promise. If Bailey had of cut rates she would have had more riggle room. Reeves will be furious with this decision.
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Editor
Antonia Medlicott
Founder & MD at Investing Insiders
Savers can breathe a little easier as the Bank of England’s decision to hold rates means their current returns are likely safe for now. But with a narrow 5–4 vote, unease still looms large.

There's never a bad time to shop around, but it's critical to do so when there's so much uncertainty in the economy. Unless you’re on a tracker, variable-rate accounts could still slip lower - and with a jittery pre-budget atmosphere, providers may well turn cautious.
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Prem Raja
Head of Trading Floor at Currencies 4 You
The BoE kept interest rates on hold today at 4%, in line with expectations. With 4 members voting for a cut, understandably, it seems the BoE are in wait-and-see mode with the upcoming Budget in a few weeks. Sterling exchange rates have been relatively stable since the announcement, as it wasn't much of a surprise, and traders are now betting on a December rate cut of 25 bps from the BoE.
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Patricia McGirr
Founder at Repossession Rescue Network
The Bank’s taken a breather, but borrowers can’t. Holding at 4% feels less like calm and more like a holding pattern. The markets might sigh in relief, but mortgage holders are still gasping. We’re told stability is back, yet the strain on households hasn’t shifted. The only thing moving faster than inflation now is frustration and fear. If the Bank’s waiting for perfect timing, it might find the public’s patience has already expired.