How does today’s rate decision affect borrowers
The Bank of England has kept the base interest rate steady at 4% on Thursday, in its final monetary policy meeting before the Autumn Budget later this month.
In the lead-up to the announcement, market analysts noted that the decision was a close call, saying that while the rate pause was more likely, some uncertainty remained.
Voting 5–4, members of the Monetary Policy Committee decided to exercise caution, opting to wait for the Chancellor’s upcoming Budget, which may bring significant fiscal changes. Four members voted to reduce the rate by 0.25% to 3.75%.
This marks the second consecutive meeting at which the central bank has left rates unchanged, as it continues its efforts to bring annual inflation closer to the 2% target. The base rate remains at its lowest point in more than two years, following five reductions since August 2024.
The Monetary Policy Committee voted by a majority of 5-4 to keep interest rates at 4%.
— Bank of England (@bankofengland) November 6, 2025
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“The Bank of England has kept bank rate at 4%, choosing patience over pre-emption,” said industry commentator Nicholas Mendes of London broker John Charcol. “It is a pragmatic decision by the Bank, knowing that tighter fiscal policy could do part of its job for it, pulling inflation lower in 2026 without the need for another rate cut now. For the moment, policymakers appear comfortable that monetary policy is restrictive enough and that disinflation is well established across the economy.
“Holding steady also gives the Bank time to test whether the current slowdown is temporary or something deeper. Consumer spending remains subdued, business investment patchy, and mortgage approvals are only just starting to recover. By waiting, the Bank can see whether underlying momentum stabilises through winter before deciding whether to ease in the new year.”
Mendes pointed out that “today’s decision changes little in the short term” for borrowers. “Fixed rate mortgage pricing has already adjusted to the expectation that rates will move lower through 2025,” he said.
“The best two-year fixed rate is now around 3.64%, with five-year deals close to 3.8%, levels not seen since early 2023. Lenders have been edging rates down for several weeks, reflecting calmer swap markets and a gentler inflation backdrop. Most homeowners can take comfort that the volatility of last year has given way to a steadier market. It is also a reminder that mortgage rates move ahead of the Bank’s decisions, not after them. Lender’s price based on swap rates, which reflect expectations of future base rate movements rather than today’s announcement.
“As a result, those coming to the end of deals in 2026 may well find a gentler landing than they feared a year ago. For anyone remortgaging in the next six to twelve months, it is worth remembering that it is rarely wise to sit tight and second-guess the market based on current sentiment. A far better approach is to plan early, review your options regularly, and work with a mortgage broker who can monitor rates and advise if a better deal becomes available.”
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