Bank of England Base Rate Update: March 2026
At the latest meeting, the Monetary Policy Committee voted to keep the base rate at 3.75%.
This decision was unanimous, meaning every member agreed that holding the rate was the right move for now.
The next review is due on 30 April 2026, where the rate could change depending on how the economy develops.
Why has the rate stayed the same?
There are two main things influencing this decision right now:
1. Rising energy prices
Recent conflict in the Middle East has pushed up global energy prices. This includes oil and gas, which affects:
- Fuel prices at the pump
- Household energy bills
- Business costs
When businesses pay more to operate, those costs often get passed on to you through higher prices.
This is one of the main reasons inflation is expected to rise again in the short term.
2. Inflation is still above target
Inflation had been falling earlier in the year, which was a positive sign. However, due to rising energy costs, it is now expected to increase again.
Current expectations are:
- Around 3% to 3.5% inflation over the next few months
- Possibly staying above the 2% target for longer than previously expected
The Bank of England’s goal is to keep inflation at 2%, so they are being cautious before making any changes.
What does this mean for mortgage rates?
Although the base rate hasn’t changed, mortgage rates can still move.
In fact, some lenders have already increased rates slightly in response to rising costs and uncertainty.
Here’s what you need to know:
Fixed-rate mortgages
- Pricing is influenced by future expectations, not just today’s base rate
- Rates may rise or stay higher if inflation concerns continue
- Deals can change quickly, even without a base rate increase
Variable and tracker mortgages
- These are more directly linked to the base rate
- Since the rate hasn’t changed, your payments are likely to stay the same for now
- Future changes will depend on upcoming decisions
What could happen next?
The Bank of England has made it clear that they are watching the situation closely.
There are a few possible paths from here:
If inflation stays high
- Interest rates could stay where they are for longer
- There is even a chance of a rate increase if inflation rises further
If the situation settles
- If energy prices stabilise and inflation drops again, rates could start to come down later in the year
If the economy weakens
- Higher energy costs can slow spending and growth
- If this happens, the Bank may reduce rates to support the economy
Right now, there is a lot of uncertainty, so decisions will be made step by step.
How does this affect you?
This depends on your current situation.
If you already have a mortgage
- Fixed rate: your payments won’t change until your deal ends
- Variable rate: no immediate change, but keep an eye on future updates
If you’re looking to buy
- Mortgage rates may remain higher than in previous years
- Lender criteria and affordability checks are still important
- Getting advice early can help you understand your options
If you’re remortgaging soon
- It’s worth reviewing your options sooner rather than later
- Rates can change quickly, and timing can make a difference
- Securing a deal early can give you more certainty
A simple way to think about it
Right now, the Bank of England is pausing.
They are not increasing rates, but they are also not cutting them yet. This is because:
- Inflation is still above target
- Energy prices have created new uncertainty
- The full impact on the economy isn’t clear yet
So instead of reacting quickly, they are waiting to see how things develop.
Why this matters for your decisions
Even though this update might seem like “no change”, it still matters.
A stable base rate doesn’t always mean stable mortgage rates. Lenders are already adjusting pricing based on what they think will happen next.
This means:
- The best deals can come and go quickly
- Waiting could cost more if rates rise
- Acting early can give you more control
Every situation is different, so it’s important to base decisions on your own circumstances rather than headlines.
Speak to Kerr & Watson
If you’re unsure what this means for you, this is where good advice makes a real difference. Speak to Kerr & Watson Today.
At Kerr & Watson, you’ll get clear and straightforward guidance based on your situation. Whether you’re buying, remortgaging, or just planning ahead, we’ll help you understand:
- What you can borrow
- What your monthly payments could look like
- Which lenders are most suitable for you
Most importantly, you’ll get honest advice without jargon or pressure.
Conclusion
The base rate has been held at 3.75% in March 2026, but the bigger story is what’s happening around it.
Rising energy prices have added uncertainty, and inflation is expected to increase in the short term. Because of this, the Bank of England is taking a cautious approach and waiting before making its next move.
For you, this means staying informed and making decisions based on your own plans rather than trying to predict the market.
If you’re thinking about your next move, getting advice now can help you stay one step ahead.
Read more: Bank Rate maintained at 3.75%
