BoE Maintains 4.25% – Time to Lock in a Competitive Mortgage Deal

Good news for mortgage holders and buyers watching interest rates. The Bank of England has held the base rate at 4.25% following a 6–3 vote — but it has strongly hinted that cuts could begin as soon as August.

Amid slowing wage growth, rising unemployment, and a drop in April’s economic output, policymakers are signalling that the cycle of rate rises has firmly turned. And for those looking to fix mortgage deals or remortgage soon, this could bring welcome opportunities.

The Monetary Policy Committee (MPC) voted by a majority of 6–3 to leave the Bank Rate unchanged at 4.25% in June 2025. Three members voted in favour of a 0.25% cut, citing growing signs of a weaker labour market and easing inflationary pressures.

Governor Andrew Bailey said the UK economy remains "highly unpredictable" but confirmed that “interest rates remain on a gradual downward path.” Inflation, currently at 3.4%, has been falling steadily and the Bank is now assessing how long it can maintain higher borrowing costs.

This comes after strong growth at the start of the year was followed by a sharp economic contraction in April, and global risks — such as conflict in the Middle East and energy price volatility — are still under close watch.

Commentators say the hints from the Bank of England are already influencing market behaviour. Kevin Peachey, Cost of Living Correspondent, notes: “Lenders tend to price their products based on future expectations. Hints of cuts may give lenders confidence to reduce fixed-rate mortgage deals.”

The Confederation of British Industry (CBI) echoed the sentiment, calling this rate hold a “pit stop on the way down” and predicting three further cuts by early 2026, which could bring the Bank Rate down to 3.5%.

As rates continue to edge downwards, buyers and remortgagers — particularly contractors and self-employed professionals — could benefit from improved lending conditions. That said, global uncertainty and domestic inflation trends will remain key drivers in the Bank’s next decision, expected in August.