Bank Rate Held at 3.75% — What the MPC Decision Means

The Bank of England's Monetary Policy Committee (MPC) voted to hold Bank Rate at 3.75% at its meeting on 19 March 2026. The decision was a narrow 5-4 split, with five members voting to hold and four voting for a further 0.25 percentage point cut to 3.50%.

Why the MPC Held Rates

The committee noted that while inflation has been falling — CPI dropped to 3.0% in January 2026, down from a peak of 11.1% in October 2022 — it remains above the Bank's 2% target. The February Monetary Policy Report projected that CPI inflation would fall back to around 2% from April 2026, as the impact of previous energy price rises drops out of the annual comparison.

However, the MPC highlighted that services inflation, which tends to be more persistent and is closely linked to domestic wage pressures, remains elevated. Annual growth in regular pay (excluding bonuses) was 5.9% in the three months to December 2025, according to the ONS. The committee indicated that it needs to see further evidence of a sustained decline in underlying inflationary pressures before cutting rates further.

The Case for Cutting

The four members who voted for a cut argued that monetary policy is currently restrictive and that the economy shows signs of weakening demand. GDP growth has been subdued, with the ONS reporting quarterly growth of just 0.1% in Q4 2025. Business surveys, including the S&P Global/CIPS Purchasing Managers' Index, have pointed to slowing activity in both manufacturing and services.

These members argued that maintaining rates at the current level for too long risks pushing the economy into a more prolonged slowdown, which could eventually push inflation below target.

What This Means for Borrowers and Savers

For mortgage holders, Bank Rate remaining at 3.75% means that variable-rate and tracker mortgage payments are unchanged. Fixed-rate deals are priced based on market expectations for future rates, and swap rates have been pricing in further gradual cuts over the course of 2026.

For savers, rates on easy-access accounts and fixed-term savings products are likely to remain relatively stable in the short term, though they have been gradually declining from the highs reached in late 2023 and 2024 as the market anticipates further cuts.

What to Watch Next

The next MPC decision is due on 30 April 2026. Key data points the committee will consider include the February and March CPI releases, labour market statistics, and any developments from the Chancellor's Spring Statement on 26 March. Market pricing currently implies a roughly even chance of a cut at the April meeting.

For a broader view of UK economic data including inflation, GDP, and employment figures, see the UK Economy Dashboard.