The Bank of England’s current official Bank Rate is 3.75%. This will be fixed until the next BoE base rate decision. The next Bank of England Monetary Policy Committee (MPC) decision is scheduled for 19th March 2026.
Are interest rates predicted to go up or down in the UK in 2026?
UK interest rates are predicted to drift down in 2026, but in a gradual, stop-start way rather than a straight line.
Online mortgage broker, Tembo’s outlook suggests the Bank of England could cut the Bank Rate from 3.75% to around 3.25%–3.5% by mid-to-late 2026 if inflation continues to ease. External expert commentary is broadly similar, with many expecting one or two cuts over the year.
Are UK interest rates going down in 2026?
UK interest rates have already come down from 4.00% to 3.75% in December 2025, and the “base case” for 2026 is further cuts. However, inflation data can change the timing, so cuts may be slower or later than people hope. Even so, lenders can still adjust mortgage pricing ahead of base rate decisions if they think cuts are coming.
How high could interest rates go uk in 2026?
The main expectation is not that UK interest rates will no go higher, but that they trend lower. Tembo Money’s forecast range is 3.25%–3.5% by mid-to-late 2026, with some more optimistic predictions that rates could reach 3.0% by the end of 2026. The biggest reason rates might not fall as quickly is if inflation proves “sticky”, prompting the Bank to take a cautious approach.
What are interest rates?
In the UK, when people say “interest rates” they usually mean the Bank of England Bank Rate. It influences:
- the cost of borrowing money via mortgages, loans and credit cards.
- the return on savings interest rates
But it’s not a direct correlation. Mortgage and savings rates are also influenced by market expectations, bank funding costs, and lender competition.
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Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
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