TL;DR
The Bank of England held the base rate at 3.75% at its June 2026 MPC meeting (voted 7-2; two members wanted a rise to 4.00%). UK CPI inflation is 2.8% (ONS May 2026), above the 2% target, and is expected to rise to around 3.25% by end of 2026 as energy costs feed through. A rise to 4.00% in H2 2026 is possible; rate cuts are not expected until inflation returns sustainably toward 2%. The next MPC decision is 30 July 2026.
Last reviewed: June 2026
Key Facts
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Current Bank of England base rate
The Bank of England's Monetary Policy Committee held the base rate at 3.75% at its meeting ending 17 June 2026. The vote was 7-2: seven members voted to hold, two members voted to raise the rate by 25 basis points to 4.00%. This is the fourth consecutive hold following a series of cuts from the peak of 5.25% reached in August 2023. The BoE cut rates progressively through 2024 and into 2025, reaching 3.75% in December 2025, but the cutting cycle paused due to persistent above-target inflation. Source: Bank of England Monetary Policy Summary and Minutes, June 2026 (bankofengland.co.uk).
Why the BoE is holding
Two competing forces are shaping BoE policy in mid-2026. On one side, inflation remains above the 2% target at 2.8% CPI (ONS May 2026). The BoE projects CPI to rise toward 3.25% by Q4 2026 as energy price increases from the February 2026 Middle East conflict continue to feed through. The US-Israel operation against Iran temporarily closed the Strait of Hormuz, disrupting approximately 20% of global oil trade. Although prices have partially recovered, they remain above pre-conflict levels. Second-round effects, where higher energy costs push up wages and business prices, are a key concern for the two MPC members who voted for 4.00%. On the other side, the UK economy has softened. GDP contracted 0.1% in April 2026 (ONS). Unemployment is at approximately 4.9%, near a six-year high. Wage growth has slowed. Source: BoE MPC Minutes June 2026; ONS CPI May 2026; ONS GDP April 2026; ONS Labour Market Statistics.
Base rate history
| Date | Base rate | Direction |
|---|---|---|
| August 2023 | 5.25% | Peak |
| August 2024 | 5.00% | First cut |
| December 2024 | 4.75% | Cut |
| February 2025 | 4.50% | Cut |
| May 2025 | 4.25% | Cut |
| August 2025 | 4.00% | Cut |
| December 2025 | 3.75% | Cut (current) |
| June 2026 | 3.75% | Hold (7-2) |
Rate forecast: key scenarios
Rise to 4.00% in H2 2026: If UK CPI rises materially above 3.25% in Q4 2026 due to energy costs or wage pressure, the MPC could raise at the July or September 2026 meeting. Two members are already voting for this outcome. A 25 basis point rise would add approximately GBP15 to 25 per month to a tracker mortgage with GBP200,000 outstanding and push new two-year fixed rates toward 5.0-5.5%.
Hold at 3.75% through end of 2026: If CPI falls more quickly than expected and the labour market remains soft, the MPC could hold for the remainder of 2026, potentially beginning cuts in H1 2027. This is broadly consistent with the BoE's own central-case scenario from the June 2026 minutes.
Cuts resume H1 2027: If inflation falls sustainably toward 2% by Q1 2027, the committee could restart cutting with a move to 3.50% or lower. Under this scenario, two-year fixed rate mortgages could move toward 3.8-4.2% by mid-2027.
What current rates mean for savers
With the base rate at 3.75%, the best easy access savings accounts pay up to 5.00% AER (LemFi and Revolut via ClearBank, bonus included) as of June 2026. Mainstream best: 4.55% AER (Tembo HomeSaver, Chase). Regular savings accounts pay up to 7.10% AER (Zopa). Cash ISAs are paying above 4.5% AER. If rates rise to 4.00%, savings rates could edge higher. If cuts resume in 2027, variable account rates will fall. Source: Moneyfacts 22 June 2026.
What current rates mean for mortgage borrowers
Tracker mortgages move directly with the base rate. At 3.75%, tracker deals typically run at 4.75-5.75% (base plus 1-2% margin). Two-year fixed rates are approximately 4.5-5.0% with major lenders; five-year fixes are slightly lower in some cases as markets price eventual cuts over a longer horizon. Standard variable rates (SVR) run at approximately 7-8% across major lenders. Borrowers coming off fixed rate deals from 2020-2021 face significantly higher monthly payments on remortgage.
Disclaimer: Interest rate forecasts are inherently uncertain. The Bank of England makes decisions based on economic conditions at the time of each meeting. This page is educational only. Kaeltripton Ltd is not FCA-authorised. For savings or mortgage decisions, consult an FCA-authorised adviser.
What is the Bank of England base rate in June 2026?
3.75%, held at the June 2026 MPC meeting (voted 7-2). The next decision is 30 July 2026. Source: Bank of England Monetary Policy Summary June 2026 (bankofengland.co.uk).
Will UK interest rates go up or down in 2026?
Uncertain. Two MPC members voted for a rise to 4.00% in June 2026 due to energy-driven inflation. Markets price the possibility of a rise in H2 2026 if CPI climbs materially. If inflation falls back toward target, cuts could resume in 2027.
When is the next Bank of England interest rate decision?
30 July 2026. Subsequent 2026 decisions are in September, November and December.
How does the base rate affect my savings account?
Variable rate savings accounts typically move with the base rate. Fixed rate savings bonds are unaffected until the term expires. The best easy access rates are currently paying 4.55-5.00% AER as of June 2026. Source: Moneyfacts 22 June 2026.
Sources
Bank of England Monetary Policy Summary and Minutes June 2026 (bankofengland.co.uk); ONS Consumer Price Inflation May 2026 (ons.gov.uk); ONS GDP monthly estimate April 2026 (ons.gov.uk); ONS Labour Market Statistics June 2026 (ons.gov.uk); Moneyfacts savings rate data 22 June 2026 (moneyfactscompare.co.uk); OBR Economic and Fiscal Outlook 2025 (obr.uk).
