Bank of England holds Bank Rate at 3.75% as inflation risks rise

The Bank of England has kept Bank Rate at 3.75%, leaving the UK’s key policy rate unchanged for first-time buyers in Scotland who are watching mortgage costs.

The Monetary Policy Committee meeting that ended on 16 September 2026 voted 6–3 to leave Bank Rate at 3.75%. Megan Greene, Catherine L. Mann and Huw Pill dissented, preferring a 0.25 percentage point rise to 4%. The Bank published the decision and minutes on 17 September 2026.

For buyers taking out a new mortgage, today’s hold means no immediate rise in the official rate — but the Committee’s message was more cautious than a simple pause.

Bank Rate (often called the base rate) is the interest rate set by the Bank of England. Many variable-rate mortgages move when Bank Rate changes: tracker deals are usually priced as Bank Rate plus a fixed margin, and a lender’s standard variable rate (SVR) is set by the lender but often follows Bank Rate moves up or down. A fixed-rate mortgage does not change during the fixed period, but the price of new fixed deals still moves with market expectations of where Bank Rate is heading — which is why today’s hold can matter even if you are not on a variable product.

UK CPI inflation was 3.1% in August. The Bank says inflation is projected to rise further and to peak slightly above 4% in early 2027, driven largely by higher energy prices linked to conflict in the Middle East. Governor Andrew Bailey said higher global energy costs have so far had only a limited effect on UK price and wage setting; if the volatility lasts, he warned, inflation pressure builds and raising Bank Rate becomes more likely to return inflation to the 2% target.

The minutes say household and business borrowing costs are already above pre-conflict levels. Two-year fixed mortgage quotes were about 95 basis points higher than before the conflict, with market moves feeding quickly into key lending rates.

Six members judged it appropriate to hold Bank Rate this meeting, pointing to soft labour-market conditions and the restraint already coming from tighter financial conditions. The three dissenters preferred a 0.25-point rise now, arguing that upside inflation risks had increased and that waiting for clear second-round effects could leave policy behind the curve.

The next scheduled MPC announcement is on 5 November 2026.

Scottish first-time buyers comparing deals can treat lender quotes and product terms as the practical guide to monthly costs: Bank Rate sets the backdrop, but fixed mortgage rates move with market expectations as well as the official rate.

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Bank of England holds Bank Rate at 3.75% as inflation risks rise

Sources