Bank of England Holds Rates at 3.75% Again – But the Dissent Just Flipped

The Bank of England has held interest rates at 3.75% for a fifth time this year. On the surface, that’s a non-event – same rate, same headline, same “nothing changes for now” advice you’ve read on this blog before.

Underneath it, something has actually changed. The vote was 6-3. All three dissenters wanted to raise rates to 4%, not cut them. Three months ago, that dissent didn’t exist at all. This is worth understanding properly, because it changes what you should be doing with your mortgage over the next few months.

Everything below is general market commentary, not a personal recommendation – what makes sense for you will depend on your own circumstances, so speak to an adviser before acting on anything specific to your mortgage.

What Actually Happened Today

The Monetary Policy Committee voted 6-3 to hold Bank Rate at 3.75%.

The three dissenters – including Chief Economist Huw Pill – voted for an immediate quarter-point rise to 4%.

Why the Vote Split Matters More Than the Rate

The interesting thing to take from this (if there is one) is the rise of the hawks; since April, the number of members advocating for raising rates has grown from 1, to 2 at last month’s meeting.

Why They Held (For Now)

Two things gave the majority enough cover to hold rather than move in either direction.

Inflation eased more than expected. UK CPI slowed to 2.6% in the year to June, down from 2.8% in May. That’s a bigger drop than economists were pricing in, and it’s the kind of number that makes an immediate hike harder to justify. It’s also still above the Bank’s 2% target – this is the 21st consecutive month it has been.

Oil prices are the wildcard. Renewed fighting between the US and Iran sent Brent crude from under $71 a barrel to over $100 in the space of three weeks, on fears that the Strait of Hormuz – the route for around a fifth of the world’s oil and gas trade in peacetime – would be disrupted. Prices have eased back to around $92 since, but the committee explicitly said the scale and duration of that shock, not this month’s inflation print, is what will decide where rates go next.

There’s a domestic angle too. Economists are watching new Prime Minister Andy Burnham’s tax and spending decisions closely, to see whether his plans to shield consumers from rising prices end up adding fuel to the inflation picture rather than dampening it.

What This Means For Your Mortgage

If You’re on a Tracker Mortgage

Nothing changes today – your payments stay exactly where they are. But for the first time in over a year, “nothing changes” cuts both ways. The next move being actively discussed by three MPC members isn’t a cut that would bring your payments down; it’s a hike that would push them up. Three dissenters out of nine is a growing minority, not a settled direction of travel – nobody knows for certain which way the committee goes next. But it’s worth building the possibility of a hike into your budgeting, even as a contingency.

If You’re on a Fixed Rate

You’re insulated until your deal ends, but don’t assume the fixed rates you’ll be offered next will look like the ones from earlier this year. Lenders price fixed rates on where they expect Bank Rate to go, not where it is today.

If You’re Looking to Remortgage

This is the group with the least room to wait. If your current deal ends in the next three to six months, the argument for locking in a rate now – rather than gambling on a cut that increasingly looks unlikely to arrive – is stronger than it’s been all year. Economic forecasts are educated guesses, not guarantees, and a further shift in the vote split could change that picture again. Most mortgage offers hold for three to six months, and if a better rate does appear before you complete, you can normally still switch to it.

If You’re a First-Time Buyer

The product landscape hasn’t got worse – choice is still high and affordability criteria are still relatively loose by recent standards. But the “rates will probably keep falling, so waiting costs little” logic from earlier in the year needs retiring. If the numbers work for you at today’s rate, that’s the more reliable thing to plan around than a forecast rate you may never actually see.

When’s the Next Decision?

The next MPC announcement is Thursday 17 September 2026. Between now and then, the two things worth watching are the July and August CPI figures, and whether the Strait of Hormuz situation escalates or continues to cool. Either of those could move the committee in either direction – this is genuinely a live meeting, not a formality.

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