Will the base rate decision slow rising mortgage rates?

The Bank of England has held the rate at 3.75%, despite a cut looking very likely just a few weeks ago.

All nine members of the Monetary Policy Committee (MPC) voted to hold the rate.

But how will this decision impact rising mortgage rates and did the MPC give any indication of what could happen to the base for the rest of 2026?

Read on to find out what the decision means for you – whether you're buying a home, are due to remortgage or are trying to get the best return on your savings. 

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Why has the Bank of England held the base rate?

Rising energy prices, driven by the war in the Middle East, have increased the risk of inflation in the UK. This has prompted the MPC to hold the base rate, despite earlier forecasts suggesting a cut. At its latest meeting, the MPC said that 'CPI inflation will be higher in the near term as a result of the new shock to the economy.'

All members voted to hold the rate, showing a clear consensus.

The MPC also highlighted uncertainty over how long the conflict will last and how far it could push up energy costs. While market expectations point to a relatively short-lived disruption, the committee warned that energy supply and prices may take longer to stabilise, even after the conflict ends.

• Find out more: how the Middle East conflict will impact your finances 

Mortgage rates continue to rise

Conflict in the Middle East has made the mortgage market more volatile, as lenders react to a changing economic backdrop. 

We analysed mortgage product withdrawals and new deals between 9 and 13 February, and the same period in March, to see how the market has changed. Deals available only to premier banking customers, existing customers, or tied to regional products were excluded.

In February, lenders withdrew an average of 470 mortgage deals a day, with a peak of 917 in a single day. Although almost all of these deals were then replaced with new options for borrowers. The number of products available reduced by a mere 13 over the week. 

By March, that average had risen to 1,353 deals a day, nearly three times higher. On one day alone, more than 2,000 deals were withdrawn. While many were replaced, the overall number of available deals dropped more sharply, leaving 527 fewer products by the end of the week. 

Uncertainty has also pushed mortgage rates higher. On 1 March, the average two-year fixed rate was 4.83% and the average five-year fix was 4.95%. That has now risen to 5.3% and 5.35%, respectively. 

Borrowers are now very unlikely to find a deal below 4%. On 1 March, there were 666 sub-4% mortgages available, including 404 two-year fixes and 174 five-year fixes.

The market now looks very different, with just 26 sub-4% deals remaining. Of these, only one is a two-year fixed rate, offered by Lloyds Bank. Most of the remaining sub-4% deals are variable-rate trackers. The lowest five-year fixed rate is now 4.19%, rising to 4.39% if your loan-to-value is above 80%. 

Ultimately, the decision to hold the base rate will have little impact on fixed-rate mortgages. Instead, it will be the war in the Middle East and how it impacts energy prices that dictates where mortgage rates go next.

Nicholas Mendes, of John Charcol, says that 'For borrowers, the message is simple. The market may still improve over time, but the path down now looks slower, bumpier and more dependent on events outside the UK.'

• Find out more: best mortgage rates and deals 2026

What will happen to the base rate in 2026?

At the start of February, most forecasts pointed to base rate cuts in 2026, although experts differed on how many there would be.

Forecasts now range from no further cuts this year to reductions later in 2026 and even the possibility of a rate rise. This wide range reflects the continued uncertainty in global markets.

Mendes said: 'The Bank is now more likely to stay on hold until it has greater confidence that this latest energy-led inflation shock is not feeding into wider inflation pressures. That makes a smooth run of cuts look less likely, and any further easing may now come later and more gradually than many had expected.

'If this proves to be a temporary spike and underlying inflation continues to soften, cuts later in the year are still possible. The domestic backdrop is not especially strong, and the Bank will not want to leave policy too restrictive for too long if growth and the labour market continue to weaken.

'If energy prices stay elevated for longer, or inflation expectations start to drift again, rates may stay higher for longer than markets were expecting at the start of the month.'

What does this mean for savers?

One impact of the recent market turmoil is that returns from fixed-rate savings accounts are increasing. However, the average one-year fixed-rate has only increased by 0.03 percentage points, to 3.82%, which suggests the market turmoil isn't having a significant impact on the savings market.

If you have a variable-rate savings account, today’s decision means your rate will remain unchanged.

Here are the top accounts available right now.

• Find out more: best savings rates 2026

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When is the next base rate decision?

The next MPC meeting is scheduled for Thursday 30 April.

The MPC will then have five further meetings in June, July, September, November and December.

This story is regularly updated after the latest base rate decision, with rate analysis and expert views. The last update was on 19 March 2026.