Base rate held at 4% – here's what it means and when it might change

The base rate is used by the central bank to charge other banks and lenders when they borrow money – so it influences what borrowers pay and what savers earn.

It's also used by the Bank of England as a tool to control inflation (the rate at which prices rise). The Bank has a target – set by the Government – of 2% for the Consumer Prices Index (CPI) measure of inflation. The latest figures show that CPI inflation was 3.8% in the 12 months to September this year – unchanged from August but above the Bank's target.

Why the base rate was held

The Bank's Monetary Policy Committee (MPC), which determines the rate, voted as follows:

• Five members voted to hold the base rate at 4%.

• Four members voted to cut the base rate to 3.75%.

The MPC said that "the risk from greater inflation persistence has become less pronounced recently, and the risk to medium-term inflation from weaker demand more apparent. But more evidence is needed on both."

Commenting on the decision, Nicholas Mendes, of broker John Charcol, said: "The Bank of England has chosen patience. Inflation is falling faster than expected, wage growth easing, and the labour market clearly softening. However, the MPC has opted to wait for the Chancellor's Budget later this month, where up to £40 billion of tax rises could alter the balance between growth and inflation."

The base rate could still be cut before the end of the year

Unemployment rose to 5% in the three months to September 2025, according to new figures from the Office for National Statistics published on Tuesday 11 November. This has prompted fresh speculation that the base rate may be cut in December.

Danni Hewson, head of financial analysis at investment platform AJ Bell, said: "Market expectation of a December rate cut has jumped to over 70% on [these] jobs figures, though until we see all of the Chancellor's workings in black and white, no one is taking anything for granted."

Ben Thompson, of broker Mortgage Advice Bureau, agreed that a cut was likely in the near future: "Economic growth is currently fragile, and we now know for sure the upcoming Budget will be taxing in every way, putting further pressure on households and weighing on growth. I expect as soon as there is sufficient comfort around inflation, we will get a cut, followed by more next year."

Fixed-rate mortgage deals have been improving

Mr Hollingworth said: "The fact that the general outlook for rates has improved means there's been a reduction to the cost of funds for lenders – resulting in a raft of cuts to fixed-rate mortgage deals.

"Most major lenders have trimmed back their rates in the last couple of weeks. That does mean that the expected cuts to base rate are therefore already being priced into fixed mortgage deals, whereas tracker rates will only react once the base rate is cut."

Aaron Strutt, of mortgage broker Trinity Financial, added: "Mortgage rates have been coming down over the last few weeks and rates are much more competitively priced than they were. This is great news for borrowers, especially as there are so many homeowners coming up to remortgage over the next year."

On your lender's SVR? You can likely save £1,000s with a new deal

A standard variable rate (SVR) is the rate you pay once your current mortgage deal comes to an end. SVRs have a variable rate of interest, which means the rate can change at any time.

SVRs are normally far more expensive than the best fixed or tracker deals – right now, a typical SVR is around 6.5% to 7%, while the top two- and five-year fixed rates start from 3.7% and 3.85% respectively. So if you're on an SVR, you should consider switching to a new deal now – see our Cheap mortgage finding guide.

Some savings rates have risen – check and boost what you earn now

In the past few weeks, we've seen rates on most types of savings increase slightly, though the top easy-access rate has dropped a bit. Yet regardless of these market moves, the key point is to check YOUR interest – millions are on pants rates, and can easily move their money to where it pays more. And if you're on a fix, diarise to act before it ends.

Right now, you can get 4.5% easy-access from Ulster Bank (part of NatWest) – this includes a bonus of 2.75% fixed for a year and allows unlimited withdrawals. Alternatively, West Brom Building Society pays a smidge more at 4.55% – though be warned, it drops to 1.65% if you withdraw more than three times in a year.

If you're worried about rates dropping and can lock money away, you might want to consider a fixed-rate account. Right now you can lock in for a year at 4.47% with Monument Bank, or two-years at 4.41% with DF Capital.

For full info and lots more options, see our Top savings accounts guide.