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Bank of England expected to hold UK rate at 3.75% for fifth time

The decision comes as UK inflation was 2.6% in the year to June, while a July lift is expected from a 13% rise in domestic energy prices tied to the Iran war.

Reported · Written up by our desk · Central Banks

BBC Business reports the Bank of England is widely expected to keep its benchmark Bank rate at 3.75% for a fifth meeting in a row, in what would mark the lowest level since February 2023.

The Monetary Policy Committee is meeting eight times per year, and its rate decision shapes borrowing costs for loans and mortgages as well as returns for savers. The Bank rate is set to help keep inflation, currently above the 2% target, on track.

According to BBC Business, the MPC decision is influenced by uncertainty around the global political and economic outlook and the impact on prices. Latest official figures cited show UK inflation at 2.6% in the year to June, with an expected increase in July as households feel the impact of a 13% rise in domestic energy prices.

BBC Business adds that while a hold would keep monthly repayments unchanged for tracker mortgage holders, most mortgage customers have fixed-rate deals. The outlet cites Moneyfacts data, saying the average rate on a new two-year fixed deal is 5.62%, the highest for more than a

more than a year.

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