5 February 2026
If you are covering the Bank of England's decision to hold interest rates, please see the following commentary from Ian Futcher, financial planner at Quilter:
The Bank of England has today held the base rate steady, as widely expected. While there will be no immediate change to borrowing costs, this decision reinforces the sense that we are in a transitional phase. Inflation has fallen sharply from its peak and the next move in rates is still more likely to be down than up. Markets continue to expect at least two cuts later this year, and potentially three if economic conditions allow.
A hold today therefore does not mean rates are stuck here indefinitely. Instead, it suggests the Bank wants further reassurance before beginning what is likely to be a gradual easing cycle.
Savings
For savers, a hold means elevated cash rates persist for now. After more than a decade of ultra-low returns, easy access and fixed-term accounts are still offering comparatively attractive rates.
However, once the Bank begins cutting, savings rates are typically quick to adjust downward. Providers rarely delay passing on reductions. This means the current environment may represent one of the last opportunities to lock in stronger fixed returns although in some cases the damage may already be done.
That said, cash should be purposeful. Holding excessive amounts in savings over the long term risks losing ground to inflation. For those with a longer time horizon, investing through ISAs or pensions may provide better growth prospects, albeit with the risk of volatility.
Mortgages
For mortgage borrowers, a hold means no instant change for those on tracker or standard variable rates. Monthly payments remain where they were yesterday.
However, fixed mortgage pricing is driven more by expectations of future rate moves than today’s decision. Because markets anticipate cuts later this year, swap rates have already eased from their highs, and many lenders have trimmed fixed-rate products in recent months.
At the same time, housing demand has been relatively tepid and affordability constraints are still biting. In that environment, lenders are competing hard for business. We are already seeing periods where banks and building societies tweak pricing to stay competitive, and if demand remains subdued, they are likely to continue vying for custom.
That does not mean mortgage rates will suddenly fall sharply, but it does create a more borrower-friendly backdrop than we saw during the height of rate volatility. Those approaching remortgage should review options early. Securing a deal with flexibility can provide certainty while preserving the ability to move if pricing improves further.
Debt and consumer borrowing
For households carrying credit card balances or personal loans, today’s hold means borrowing remains expensive. Credit card APRs remain historically high and are unlikely to fall quickly, even once base rate cuts begin.
Anyone managing costly unsecured debt should focus on repayment or balance transfers where possible. Waiting for rate cuts to materially reduce credit card interest is unlikely to be an effective strategy.
