"We judged that waiting for greater clarity on the outlook was the prudent course of action. While inflation has shown signs of ease and the labour market is moderating, it remains well above target. We remain fully committed to returning inflation to 2% over time"
- Andrew Bailey - Bank of England
The Bank of England (BoE) Monetary Policy Committee (MPC) today decided to maintain the Bank Rate at 4.00%, holding it steady for the second consecutive meeting.
The Committee judged that the current level continues to strike an appropriate balance between supporting economic activity and containing inflation.
Key points
Inflation remains at 3.8%, significantly above the BoE’s 2% target, and the labour market remains tight, supporting the case for caution.
Markets had assigned roughly a ⅓ probability of a rate cut to 3.75% ahead of today’s decision, indicating heightened uncertainty.
The upcoming government Budget on 26 November introduces fiscal uncertainty, which influenced the Committee’s decision to wait rather than act pre‑emptively.
For the first time, the BoE will publish individual MPC member views alongside the decision to enhance transparency.
Governor Andrew Bailey said, “We judged that waiting for greater clarity on the outlook was the prudent course of action. While inflation has shown signs of ease and the labour market is moderating, it remains well above target. We remain fully committed to returning inflation to 2% over time.”
He added that the Committee remains ready to adjust policy and will monitor incoming data on inflation, employment and output, as well as the broader global environment.
Market reaction and outlook
Following the announcement:
Investors continue to price in the possibility of a rate cut at the MPC’s December meeting, conditional on further inflation moderation and an economic outlook. Sterling held near its recent multi‑month lows against the dollar as markets weighed the decision.
Looking ahead
The MPC emphasised that it will be guided by:
The trajectory of inflation and how quickly it falls toward target.
Developments in the labour market, including wage growth and job vacancies.
The impact of fiscal policy and any unexpected shifts in economic growth.
Global inflation and supply‑side pressures.
The next meeting of the MPC is scheduled for 18 December 2025.
Industry reaction
Matt Smith, Rightmove's mortgages expert, says, "Ahead of one of the most widely anticipated and discussed Autumn Budgets of recent times, it was unlikely the Bank would go for another interest rate cut so close to the announcement and has opted for stability instead. There's still a good chance of a rate cut before the end of the year, depending on what is announced in a couple of weeks' time, and if not, then we're looking at early 2026.
"Some good news is that the cost of financing mortgages has actually come down in recent weeks. We've started to see some lenders become more competitive in certain segments of the mortgage market in recent days, and offer some headline-grabbing, cheaper rates, as they look to secure some final business before the end of the year.
"The average two-year fixed mortgage rate is now 4.44% - down from 4.95% at this time last year. The downward trend is good, but mortgage rates have come down more slowly than many were predicting at this time last year. Rates have come down even more slowly for five-year products. With the uncertainty surrounding how the upcoming Budget will impact people's finances, another rate cut, soon followed by some notable reductions in mass-market mortgage rate products, would be a big boost to home-mover sentiment and affordability."
Matthew Thompson, head of sales at Chestertons, says, “As inflation remains above the 2% target and speculations about the impact of the Budget fuel uncertainty over the economic climate, there was little chance of a rate cut today. With only one more Monetary Policy Committee meeting scheduled for this year, a rate cut will be more likely in the first few months of 2026. Despite today’s decision not to cut rates, market conditions are currently in favour of buyers which is resulting in some house hunters rushing to finalise their search before the end of the year.”
Steve Cox, Chief Commercial Officer at buy-to-let lender, Fleet Mortgages, said, “While the MPC chose to hold BBR at 4% today, the trend in mortgage pricing tells a more optimistic story. Mortgage rates have been falling in recent weeks and we expect that to continue across November. Regardless of the MPC’s decision, buy-to-let lenders, including Fleet, have been cutting rates as swaps and funding conditions improve, and this provides an opportunity for advisers and landlord clients to engage now rather than wait.
"With the Renters’ Rights Act now passed into law, landlords face a fresh set of compliance obligations and responsibilities that are likely to come with added costs. Whether it’s meeting new minimum standards or adjusting to tenancy reforms, financial planning is essential, and any savings achieved through more competitive mortgage pricing will help landlords manage these pressures. Lower mortgage costs won’t just ease affordability, they’ll support long-term investment in professional, compliant portfolios.”
