Base rate held at 4% – here's what it means and when it might change

Base Rate Held at 4% by the Bank of England

The Bank of England has decided to keep the base rate steady at 4%. This decision impacts borrowers and savers, as the base rate influences the cost of loans and the returns on savings.

Why the Base Rate Matters

The base rate is the interest rate set by the central bank for lending to other banks and financial institutions. It is a key tool for controlling inflation, which measures how fast prices rise over time.

Inflation Target and Current Figures

The Government sets an inflation target for the Bank of England, which aims for 2% inflation on the Consumer Prices Index (CPI) measure. The latest data shows CPI inflation at 3.8% for the 12 months leading to September, unchanged from August but still above the target.

Monetary Policy Committee Vote

Five members voted to keep the base rate at 4%.
Four members voted to reduce the base rate to 3.75%.

"The risk from greater inflation persistence has become less pronounced recently, and the risk to medium-term inflation from weaker demand more apparent. But more evidence is needed on both," said the Monetary Policy Committee.

Expert Commentary

Nicholas Mendes, from broker John Charcol, commented: "The Bank of England has chosen patience. Inflation is falling faster than expected, wage growth easing, and the labour market clearly softening."

Impact on Mortgages and Savings

Holding the base rate at 4% means that mortgage rates and savings returns are unlikely to change immediately, providing stability for borrowers and savers while the Bank monitors inflation trends.

Author's summary: The Bank of England maintains the base rate at 4%, reflecting cautious optimism as inflation eases but remains above target, signaling careful monitoring ahead.

Money Saving Expert — 2025-11-06