The Bank of England’s Monetary Policy Committee has voted to once again keep the base rate at 4%, a move that had been widely anticipated as inflation remains stubbornly high and global uncertainty continues to limit its room for manoeuvre.

When the base rate was cut from 4.25% to 4% in September, it was the third reduction this year. Just a few months earlier, the money markets had been predicting up to four further cuts, but the outlook has changed considerably since then.

Stubborn inflation

Inflation, which the Bank had hoped would have been closer to its 2% target, is stuck at 3.8%, with rising wage costs, higher service prices, renewed energy and shipping costs keeping it elevated.

Even so, the Bank must also take into account the effects of an elevated base rate on a weak economy, with growth flatlining and business investment slowing ahead of the Autumn Budget on 26 November, and Governor Andrew Bailey will now come under increasing pressure from Reeves to reduce the base rate.

Bailey says: “In our decision to hold interest rates today, we have balanced the risk that above-target inflation becomes more persistent against the risk that demand in the economy is weakening, which might cause inflation to fall too low.”

In better news for the property industry, markets still expect one or two further cuts later in the year, depending on how inflation data and Budget policy unfold.

Industry reaction

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ESTATE AGENTS

Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “While market expectations for a base rate cut had risen, the Bank of England has remained cautious and held it at 4 per cent for now.

“Regardless of the decision made today, we’ve recently seen lenders introduce new products and policies aimed at higher-income borrowers and larger loans, which is encouraging for the London market – particularly in the Richmond Borough.

“Although many have spoken about a market where not much is going on, which meant we were expecting a very quiet November in the run-up to the Budget, that hasn’t been the case. We’ve agreed a high number of sales – mainly freehold homes – with prices reaching up to £2.5 million.

Some buyers are moving now to hedge their bets in case the Budget proves less property-focused than expected.”

“It may be that some buyers are moving now to hedge their bets in case the Budget proves less property-focused than expected. A measured Budget and a rate cut early in 2026 would be the ideal combination to unlock more momentum in the market.”

Kevin Shaw, National Sales Managing Director, LRG, says: “No one will be surprised that the Bank of England has chosen to hold interest rates. With the Budget less than three weeks away, perhaps the Bank sees the need for some stability. And it would have been a brave move to change course in such a situation.

“There’s been so much speculation around the 26 November Budget that it’s taken on the status of a political event as well as a fiscal one. The last time we saw something of similar magnitude was the general election of July 2024. Back then, the Bank also opted for caution despite the data signalling the need for a base rate reduction. It’s clearly sticking to the same approach.

Perhaps on 18 December, when the Monetary Policy Committee next meets, with political uncertainty out of the way and inflation data moving in the right direction, we may see a reduction …well timed for Christmas.”

“The Bank’s reasoning is sound. Inflation has remained stubbornly at 3.8% for two consecutive months – not something to panic about, but not yet at the target level at which to relax either. With so much depending on what the Chancellor unveils later this month, holding steady is the least disruptive choice.

“For the property market, today’s decision means continued stability for buyers and sellers.

“Perhaps on 18 December, when the Monetary Policy Committee next meets, with political uncertainty out of the way and inflation data moving in the right direction, we may see a reduction …well timed for Christmas.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “This time around, the Bank had a more difficult decision to make than on previous occasions. Members of the interest-rate setting committee had to reconcile lower-than-expected inflation and wage growth with the likely impact of now-expected tax cuts in the Budget.

“The dangers of cutting rates further at this point could potentially reignite inflationary pressures, which the Bank will be keen to avoid.

“As far as the housing market is concerned, activity has been in the doldrums for the past month or so since speculation about the Chancellor’s intentions intensified. However, the direction of travel for interest rates appears downwards, which will give a boost to those sitting on the fence as well as others who are contemplating the end of fixed-rate mortgages at previously-agreed rock-bottom rates.”

cautious approach

Nathan Emerson, CEO of Propertymark, says: “Following four rate cuts since August 2024, today’s decision to hold interest rates reflects the Bank of England’s cautious approach in an uncertain economic climate. Stability can be reassuring for the housing market, giving buyers and sellers a clearer sense of direction after months of volatility.

“However, for many, affordability remains stretched, and the market would benefit from further easing when conditions allow. Sustained rate stability or a gentle reduction in the months ahead would help bolster consumer confidence and keep transactions moving.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “The Bank of England’s decision to hold the base rate at 4% reflects a pragmatic balance between encouraging stability and maintaining downward pressure on inflation. While inflation remains above target, the latest data suggests we’re on a steady path toward more sustainable levels. From a housing market perspective, this pause reinforces cautious confidence, buyers and sellers are re-engaging, underpinned by genuine needs rather than speculation.

activity levels remain strong

“Although mortgage rates have nudged slightly higher in recent weeks, activity levels remain strong, supported by serious movers and improving affordability trends. The increase in available stock is giving buyers more choice, which is helping to balance pricing and maintain healthy competition. Provided inflation continues to ease and the Budget avoids punitive housing taxes, we expect this measured environment to lay the foundations for a more confident and sustainable market recovery next year.”

Missed opportunity

 

Nick Leeming, Chairman of Jackson-Stops, says: “The decision to hold interest rates at four per cent reflects the Bank of England’s need to stem inflation with ongoing caution towards economic growth. This wait-and-see position is one familiar with many homebuyers at the moment, keen to know what the Chancellor’s final decisions are on tax and spending policies before committing to a move.

“However, this might have been an opportunity missed by the Bank of England’s rate-setting committee, in which a 25 basis points drop would have given the lending market a much-needed boost during this November lull. If budget tax rises harm growth, we may see interest rate cuts being used in the future to support greater market movement.

Earlier this week, lenders hedged their bets on a rate cut.”

“Earlier this week, lenders hedged their bets on a rate cut, with Nationwide reducing mortgage rates by up to 0.25 percentage points, offering the lowest two-year fixed rate since 2022. Moves such as this will be welcomed by the mortgaged majority, with the hope they won’t be short-lived. Some mortgage rates remain more than double the level they were before the pandemic, with house prices rising 26%* during the same period.

“The slow pace of building is also a concern, with chronic undersupply keeping house prices high. Inflated costs and interest rates are impacting growth in the development sector, especially SMEs, leaving government targets unmet. Greater financial headroom may have been a welcome boost to those struggling to make the numbers work.”

wider market encouraging

Guy Gittins, CEO of Foxtons, says: “The nation’s homebuyers will not be surprised to see the base rate held today, however, the wider market picture remains encouraging.

The housing market has demonstrated remarkable resilience throughout 2025, with consistent year-on-year growth supported by stable demand and improving lending conditions.

With the end of the year fast approaching, we expect this steady performance to continue as motivated buyers and sellers push to complete before the festive period, despite the uncertainty of the upcoming budget.”

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THE PORTALS

Matt Smith, Rightmove’s mortgages expert says, “Ahead of one of the most widely anticipated and discussed Autumn Budgets of recent times, it was unlikely the Bank would go for another interest rate cut so close to the announcement and has opted for stability instead. There’s still a good chance of a rate cut before the end of the year, depending on what is announced in a couple of weeks’ time, and if not, then we’re looking at early 2026.

Some good news

“Some good news is that the cost of financing mortgages has actually come down in recent weeks. We’ve started to see some lenders become more competitive in certain segments of the mortgage market in recent days, and offer some headline-grabbing, cheaper rates, as they look to secure some final business before the end of the year.

“The average two-year fixed mortgage rate is now 4.44% – down from 4.95% at this time last year. The downward trend is good, but mortgage rates have come down more slowly than many were predicting at this time last year. Rates have come down even more slowly for five-year products. With the uncertainty surrounding how the upcoming Budget will impact people’s finances, another rate cut soon followed by some notable reductions in mass-market mortgage rate products would be a big boost to home-mover sentiment and affordability.”

While this will be disappointing news for those borrowers who had hoped for a rate cut this time around, it may mean the next reduction is not too far off.”

Jason Tebb, President of OnTheMarket, says: “As expected, the Bank of England held interest rates once again at 4 per cent. Although inflation held steady at 3.8 per cent in the year to September, the vote was close, with the rate setters voting by a majority of five to four to hold rates.

“While this will be disappointing news for those borrowers who had hoped for a rate cut this time around, it may mean the next reduction is not too far off. Five rate reductions since August 2024 have been hugely welcomed by buyers and sellers alike, boosting confidence, easing affordability and giving much-needed impetus to the market, particularly since the stamp duty concession ended.

“Whatever the Budget brings later this month, once the atmosphere of uncertainty has lifted, there may still be an opportunity for the Bank to reduce rates before the end of the year, delivering a real pre-Christmas boost for the housing market. ”

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MORTGAGES AND FINANCE

Raphael Benggio, Director of Bridging at specialist lender MT Finance, says: “The decision by the MPC to maintain interest rates at 4 per cent was expected. While inflationary pressures seem to be stabilising, maintaining rates also provides some reassurance to investors and the property market in general.

Bank waiting for budget

“Although a rate reduction before Christmas would be a welcome boost to the economy, it could be that the MPC are holding out until the Autumn Budget is delivered before making a decision regarding cuts. However, we doubt this would form the basis of their decision and would suggest that the biggest driver would be whether inflation can be reduced further.”

Alpa Bhakta, CEO, Butterfield Mortgages, says: “Hopes of a fourth cut have been dashed, and for the Prime Central London market, this comes at a challenging time. A rate cut could have provided the impetus some buyers need to act with confidence.

“With the Autumn Budget causing understandable caution, tailored lender support will be key in the weeks ahead.”

Cut unlikely

Tim Parkes, CEO, RAW Capital Partners, says: “There had been predictions of a cut to revive sluggish growth, but in reality, such a move was always unlikely. Inflation remains frustratingly sticky near 4%, and the uncertainty around the Budget favours a cautious approach.

“If inflation drops further after the Budget, the base rate could resume its steady decline, which would boost the property market.”

Paresh Raja, CEO, Market Financial Solutions, says: “With consumers, investors and businesses all braced for the Budget, a cut had the potential to galvanise the market. But there is too much political and economic uncertainty.

“For now, we must focus on helping borrowers navigate the market and be ready to adapt once the Budget sets a clearer course.”

 

We are encouraged by four members voting for a reduction in base rate to 3.75 per cent and hope more of the Committee come round to their way of thinking in due course.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “There was a slim chance that the Bank of England would cut interest rates this month, but ongoing concerns over inflation, which remains steady at 3.8 per cent, and perhaps a bit of wait-and-see as to what impact the Budget has, meant caution prevailed.

“We are encouraged by four members voting for a reduction in base rate to 3.75 per cent and hope more of the Committee come round to their way of thinking in due course, perhaps even as soon as next month. Market expectations are for another rate cut before the end of the year, with the ‘big six’ lenders active in reducing rates in recent days in an effort to drum up business before the year-end. Nationwide is the latest to cut rates for home movers, those remortgaging and first-time buyers, with its lowest two-year fix now pegged at 3.64 per cent [up to 60 per cent LTV with £1,499 fee].

“A rate cut today would have been a welcome shot in the arm for the housing market amid much speculation as to what property taxes – and more – will be included in the Budget in three weeks. Despite five rate reductions since August last year, affordability concerns persist, with borrowers having to get used to higher mortgage rates. Further rate reductions are necessary to boost not only the housing market but the wider economy.”