Bank of England Holds Interest Rates at 3.75%: What the July 2026 Decision Means for Your Mortgage

Did the Bank of England change interest rates in July 2026?

No. The Bank of England held the base rate at 3.75%, announced at midday alongside the minutes of the meeting and a full Monetary Policy Report. It was widely expected: almost every economist surveyed beforehand predicted a hold, and so did the vast majority of mortgage brokers. So the headline was no surprise. The interesting part was always going to be how the committee voted and what it said about the months ahead.

How did the Monetary Policy Committee vote?

The Bank's Monetary Policy Committee, the nine people who set the base rate, held by a majority of 6 to 3. Six members voted to keep the rate at 3.75%. Three of them, Megan Greene, Catherine Mann and Huw Pill, wanted to raise it to 4%.

That split is the part worth watching, because the group pushing for higher rates keeps growing. In April, only one member voted for a rise. In June it was two. Now there are three. The members wanting a hike argue that higher rates now would guard against inflation getting stuck above target. The majority preferred to wait, judging that a weaker economy and a softening jobs market will help bring inflation down on their own.

Why did the Bank of England hold interest rates?

The committee is walking a tightrope, and the hold is the safest place to stand while it waits for more information.

On one side, inflation is behaving better than expected. Prices rose by 2.6% in the year to June, down from 2.8% in May, and lower than many had forecast. That alone made a cut look unnecessary and a rise hard to justify right now.

On the other side, the Bank is still wary about what comes next. Energy prices have fallen back from their spike earlier in the conflict, but they remain higher than before it started and the Bank flagged that they are still volatile. The committee expects inflation to tick up again later this year as earlier energy cost rises continue to feed through, reaching a little over 3% by the end of 2026 before easing back.

Pulling in the opposite direction is a weakening economy. The UK shrank by 0.1% in April, the first monthly fall since last summer. Unemployment is running at 4.9%, close to a six year high, and wage growth has slowed. A softer jobs market usually helps bring inflation down, which would normally support lower rates. So the Bank is caught between energy driven inflation on one side and a stalling economy on the other. Faced with that, sitting still and waiting for clearer data was the obvious move.

What the July 2026 decision means for your mortgage

Here is the part most people get wrong. The headline decision matters far less than the coverage suggests.

If you are on a tracker or your lender's standard variable rate, nothing changes today. Those rates move directly with the base rate, and the base rate has not moved.

If you are looking at a fixed rate mortgage, this is the key point. Fixed rates are not priced off the base rate. They are priced off swap rates, which reflect where the market thinks rates are heading rather than where they are today. That is exactly why fixed mortgage rates have been getting cheaper even though the base rate has stayed put. Several major lenders, including NatWest, Barclays, TSB and Santander, have cut fixed rates over the summer, and a growing number of deals are now under 4% for buyers with a decent deposit.

So the practical picture is this. Tracker and variable customers see no change. Anyone shopping for a fixed deal is doing so in a market that has quietly been improving, driven by the markets, not by today's announcement. For the wider view, see our guide to mortgage rates.

Will interest rates go up or down in 2026?

This is where honesty matters, because nobody knows for certain.

A poll of 65 economists found no agreement on what happens after this meeting. Most expect rates to stay at 3.75% for the rest of the year. Around four in ten think there could be at least one rise before December. Only a handful expect a cut. The forecasts for where rates end up in 2026 range from 3.5% all the way to 4.25%, which is a wide spread. The single biggest factor is the Middle East and what it does to energy prices. The bigger that shock, the more likely a rise. A cut looks unlikely for now.

The Bank meets next on 17 September 2026, then again in November and December.

The bottom line

Trying to time the market around a single rate decision rarely pays off. Mortgage rates move on expectations, often weeks before any announcement, so the deal in front of you today usually beats the one you are hoping for next quarter.

If your current deal is ending in the next six months, now is a sensible time to look at your options. A good broker can secure a rate now and still switch you to a cheaper one if rates fall before you complete. That gives you certainty without locking you out of a better deal. For more, see what happens when your fixed rate ends, the difference between a product transfer and a remortgage, and our full remortgage guide.

This article is general information about the mortgage market and does not constitute financial advice. For advice based on your own circumstances, speak to a qualified, regulated mortgage adviser. Your home may be repossessed if you do not keep up repayments on your mortgage. Source: Bank of England, Bank Rate.