5 November 2026
If you are covering what the latest Bank of England interest rate decision means for your money, please see the following comment from Ian Futcher, financial planner at Quilter:
Savings
“The decision to hike rates to 4% underlines the difficult balancing act facing the Bank of England as it seeks to contain inflation without placing too much strain on households and the economy. For savers, the increase is positive in principle, although there is no guarantee that banks and building societies will pass it on in full. While they tend to be quick to reduce savings rates when the Bank Rate falls, increases take longer to feed through, so it is important to shop around. Too many people have money sitting in accounts paying uncompetitive rates, so now is a good time to make sure your money is working as hard as it can be.
Mortgages
“For mortgage borrowers, the picture is more challenging. Those on tracker deals will see their repayments rise. Someone with a £250,000 mortgage with a term of 25 years, on a tracker rate of 5% that rose to 5.25% in line with today’s rate hike, would see their monthly repayments increase from £1,462 to £1,498 a month – a difference of £432 a year.
“Meanwhile, borrowers approaching the end of a fixed term face refinancing into a more expensive market. Fixed term mortgage rates are influenced by swap rates and expectations for the future path of interest rates, so some of today’s rise is already reflected in current pricing.
“The outlook remains highly dependent on inflation and wage data, but markets currently anticipate further tightening that would see mortgage rates moving higher still. That said, this is clearly a period of higher interest rates once again, so consumers may be in for a prolonged period of elevated borrowing costs and thus need to make sure they shield themselves as best they can.
“The base rate sat at just 0.1% in 2021, so those moving off five-year fixes will need to consider their options carefully. Borrowers coming to the end of a fixed deal or looking to secure a new one should therefore consider securing a deal sooner rather than later. Many mortgage offers can be secured several months in advance, and you can usually switch to a cheaper option if one becomes available before completion.”
Credit cards and debt
“Credit card APRs and other unsecured borrowing costs are already high, and today’s decision could see them rise further. Lenders are also taking a cautious stance, so borrowers may find competitive loan rates harder to secure. Anyone carrying a balance should prioritise shifting to a cheaper deal or accelerating repayments wherever possible.”
Annuities
“A rise in interest rates should provide further support for annuity rates, which are already high, and may be welcome news for retirees looking to secure a guaranteed income. However, it is important to consider the wider picture. Gilt yields and wider market conditions also play a significant role in annuity pricing, while a diversified approach to retirement income, potentially combining annuities with drawdown, may be more appropriate for those seeking a balance between security and flexibility. People approaching retirement should carefully consider their wider financial circumstances before making any major decisions, ideally with the support of a financial planner.”
