Watch the 60 second version, or read on for the full breakdown.
One question keeps coming up this week: are interest rates going up, and by how much? One headline says two rises, another says four. Both are quoting real forecasts. They just come from different places. This edition sets out who is saying what, why they disagree, and the handful of dates that will decide who turns out to be right. Then, most importantly, what to do about it if you have a mortgage decision coming up.
Where things stand today Confirmed
Bank Rate is 3.75%. On 17 September the Bank of England's Monetary Policy Committee held it there for the sixth decision in a row, but the vote was six to three. Megan Greene, Catherine Mann and Huw Pill all voted to raise it to 4% straight away.
The reason is energy. According to the Bank's own minutes, the conflict in the Middle East had pushed Brent crude to $106 a barrel and UK wholesale gas to 207 pence a therm, up 36% and 78% since the Bank's July forecast. Inflation was 3.1% in August, and the Bank expects it to reach around 3¾% by the end of this year and slightly above 4% in early 2027. Its target is 2%.
Who expects what Forecasts
Here are the main forecasts, with who made them. A forecast is a best guess, not a promise, and as you will see below, they can change quickly.
| Who | What they expect | Where Bank Rate ends up |
|---|---|---|
| Capital Economics | Two rises, in November and February | 4.25% |
| Oxford Economics | Two rises, in November and February | 4.25% |
| Fidelity International | Two rises, in November and February, then a hold | 4.25% |
| Bank of America | Two rises, in November and February | 4.25% |
| AJ Bell | No change this year, with the next move possibly a cut | Unchanged at 3.75% in 2026 |
| Financial markets | A steady climb, according to the Bank's own minutes | Around 4.9% by the end of 2027 |
So the "two rises" headlines come from economists, and it is the most common view among the named forecasters. The "four rises" headlines come from the financial markets, where traders are effectively betting on where rates will go. A peak of around 4.9% from 3.75% would mean four or five quarter-point rises. On 24 September, markets put the chance of a rise in November at around 75%, according to Reuters.
How quickly the picture has changed
This is the part worth remembering next time you see a confident headline. In a Reuters poll taken between 4 and 8 September, 57 of 65 economists expected no change to Bank Rate for the rest of this year, and the typical view was that the next move would be a cut, in the third quarter of 2027. By the end of September, Capital Economics, Oxford Economics, Fidelity and Bank of America were all forecasting two rises, and the markets were pricing in more.
It works the other way too. As recently as June, fixed mortgage rates were falling at their fastest pace since October 2024, and Moneyfacts' average two-year fix dropped to 5.52%. By 17 September it was back up at 5.73%. Nobody got that wrong because they were careless. The world changed, and the forecasts changed with it.
The lesson is not to ignore forecasts. It is not to bet your mortgage on any single one of them.
What it all depends on
The Bank has been clear that the answer depends on the energy shock. In its own words, the policy needed "will depend on the scale and duration of the shock and how it propagates through the economy." In plain English: how high energy prices stay, for how long, and whether they start pushing up wages and prices more widely.
Even the Bank's own policymakers are reading that differently:
- Leaning towards a rise: Deputy Governor Clare Lombardelli said on 24 September that policy "is increasingly likely to need to tighten if elevated energy prices persist", unless there is clear evidence of inflation easing or the economy weakening.
- Leaning against: Alan Taylor said on 29 September that the case for further rises "is not compelling to me unless energy prices remain high for an extended period", and that once energy risks fade, rates will eventually need to come down.
So if oil and gas stay high and it starts to feed into wages and wider prices, expect the markets to be closer to the mark. If energy prices ease, the two-rise forecasts, or even fewer, look more likely.
The dates to watch
20 October: latest jobs and wages figures (unemployment is currently 4.9% and regular pay growth 3.5%).
21 October: September inflation figures.
28 October: the Budget.
5 November: the Bank's next rate decision, with a full new set of forecasts.
17 December and 4 February 2027: the decisions after that.
Why fixed rates have already gone up Confirmed
You do not have to wait for the Bank to move to feel this. Fixed mortgage rates are priced from swap rates, which move on what the markets expect Bank Rate to do in future. That is why fixed rates have risen even though Bank Rate has not. On 30 September, Moneyfacts reported that the lowest two-year fixed rate for someone remortgaging was 5.06%, and that the lowest remortgage rates had all moved above 5%.
What it means for you
- On a tracker or standard variable rate? Your payments move with Bank Rate. As a rough guide, on a £200,000 repayment mortgage over 25 years at around 4.75%, each quarter-point rise adds about £29 a month. Two rises would add about £58 a month, and four about £118 a month. Our fixed vs tracker guide explains the trade-off.
- Fixed rate ending in the next year? Do not wait for the headlines to settle. Lenders covering about 90% of the mortgage market have signed the Mortgage Charter, which commits them to let existing customers lock in a new deal up to six months before their fixed rate ends, and to ask for a better like-for-like deal before it starts if one comes along. A remortgage to a new lender can also usually be arranged months in advance. Either way, your new rate only starts when your current deal ends, so you keep paying your current rate until then. Our product transfer vs remortgage guide compares the two routes.
- Buying a home? Get your agreement in principle in place, and build a little room into your budget in case rates move between now and completion.
- Whatever your situation: plan for a range, not a single number. If your budget works whether we get two rises or four, you are in a good place.
If rates go up, could you still pay the mortgage if you could not work?
Most of us plan for rate rises. Fewer of us plan for the other thing that can stop the mortgage being paid: being off work through illness or injury for months rather than weeks. Statutory Sick Pay is a fixed weekly amount, and for most people it is far less than they normally earn.
Income protection is designed for exactly that. It pays you a regular monthly income, usually a set percentage of your earnings, if you cannot work because of illness or injury. Payments start after a waiting period you choose, and can carry on until you return to work or the policy ends. A longer waiting period usually means a lower premium, so it is worth matching it to how long your sick pay or savings would last.
Our income protection guide explains how it works, and the wider protection hub covers life cover and critical illness cover too. If you would like it costed for your own circumstances, Debbie at DS Financial can talk it through with you, with no pressure and no obligation.
That is where the forecasts stand. The next big moment is the Bank's decision on 5 November, and we will cover what it changes when it happens. If anything here raises a question about your own mortgage, drop us a line, or have a no-pressure chat with Debbie at DS Financial.
General information, not financial, tax or legal advice. Forecasts are the views of the organisations named at the time stated and are not predictions by Darren Talks or DS Financial. Figures correct at the time of writing (2 October 2026) and may change quickly. Repayment examples are illustrative only, calculated on a £200,000 capital and interest mortgage over 25 years, and will differ for your own mortgage. Mortgage rate figures are subject to lender criteria and change. Your home may be repossessed if you do not keep up repayments on your mortgage.
Sources: Bank of England, Monetary Policy Summary and minutes, September 2026 (17 September 2026), HomeOwners Alliance, latest UK interest rate forecasts (updated 1 October 2026), Reuters poll via Investing.com (8 September 2026), Reuters, "BoE's Lombardelli sees rates rising if energy prices stay high" (24 September 2026), Bank of England, "Searching for signposts", speech by Alan Taylor (29 September 2026), ONS, Consumer price inflation (16 September 2026), ONS, Labour market overview (15 September 2026), Bank of England, upcoming MPC dates, HM Treasury, Budget 2026 date (31 July 2026), The Intermediary, Moneyfacts Mortgage Trends (13 July 2026), Moneyfactscompare, "BoE Holds Interest Rates at 3.75%" (17 September 2026), Moneyfactscompare, best mortgage rates this week (30 September 2026), FCA, Mortgage Charter uptake (8 September 2026).