Bank of England Base Rate Held at 4.5%

In what may come as a blow to millions of homeowners around the UK, the Bank of England has held the base rate of interest at 4.5 after its last meeting on 20th March. This was partly due to deep uncertainty regarding the UK and world economies, particularly the current global trade tensions led by the US. Many homeowners were hoping for another cut to interest rates to follow on from the last Bank of England meeting but unfortunately, it wasn’t to be. Let’s explore further why the base rate was held, what it means for UK mortgages, and how a mortgage broker can help.

Why Did the Bank Hold the Base Rate?

The Bank of England base rate is used to charge other banks and lenders when they borrow money, and it is also used to control inflation, which has a target of 2%. After almost hitting its target, inflation rose to 3% in January of this year, forcing the Monetary Policy Committee (MPC) to vote against an interest rate cut to control the rate of inflation. The MPC stated that “Domestic price and wage pressures are moderating but remain somewhat elevated. Although global energy prices have fallen back recently, they remain higher than last year, and CPI inflation is still projected to rise to around 3.75% from July to September 2025.” The hold on the base rate projects some uncertainty for the next few months, which is obviously a blow to borrowers, but there is still positivity around where they will head for the rest of the year.

What Can We Expect to Happen Next?

The future for interest rates is still uncertain with a fight against the creeping rise of inflation, but there is still some positivity around gradual interest rate cuts for the rest of 2025. Analysts believe that, even though we’re currently amidst an economic growth and inflation rise battle, financial markets are suggesting that it's possible to see another rate cut in May, although there are no guarantees. Matt Swannell, a macroeconomist from the economic research group EY Item Club states, “It seems likely the current gradual pace of interest rate cuts will continue until at least the summer, at which point the MPC will likely have more meaningful information to hand on the longer-term outlook.”

What Does the Future Look Like for UK Mortgages?

Mortgage lenders were cutting their rates right up until the eve of the Bank of England meeting, and this is still likely to continue. Holding the base rate gives lenders the scope to reduce rates further, the difference being the pace and extent to which they are reduced. Much of the prospective rate cuts and rises are already built into mortgage market pricing, which suggests that mortgage rates are close now to what they will be for some time, with incremental shifts along the way. Fixed-rate mortgages may lower toward the end of the year if inflation falls back to its 2% target.

TaylorMade: How Your Trusted Mortgage Broker Can Help

We understand if you’re feeling the disappointment of this hold in the base rate, especially if you’re a homeowner or looking to buy your first home. Interest rates are still higher at present, and navigating the best rates can feel like a daunting task, but it doesn’t have to be. At TaylorMade, we are a specialist, independent mortgage broker in Manchester who works with hundreds of lenders, giving us access to the best deals on the market right now. Based in Manchester but operating throughout all of the UK, our team of mortgage brokers at TaylorMade have the knowledge and expertise to help you get the best mortgage terms. If you would like to speak to one of our friendly, helpful mortgage brokers in Manchester, get in touch today.