The Bank of England has kept the base rate the same this month as expected
We’ve taken a look at the thinking behind this latest decision, and whether we’re likely to see any cuts next year.
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What is the Bank of England base rate?
The interest rate set by the Bank of England (BoE) is known as the base rate.
The current rate was decided on 20 March 2025, staying at 4.5%, after being cut from 4.75% in February this year. This is the lowest rate since May 2023.
Eight members of the Monetary Policy Committee (MPC) voted to keep the base rate at 4.5% while one wanted to cut it to 4.25%.
source: tradingeconomics.com
Date of announcement | Rate | Change |
March 2025 | 4.5% | No change |
February 2025 | 4.5% | -0.25 percentage points |
December 2024 | 4.75% | No change |
November 2024 | 4.75% | -0.25 percentage points |
September 2024 | 5% | No change |
August 2024 | 5% | -0.25 percentage points |
September 2023 to June 2024 | 5.25% | No change |
August 2023 | 5.25% | +0.25 percentage points |
June 2023 | 5% | +0.5 percentage points |
May 2023 | 4.5% | +0.25 percentage points |
March 2023 | 4.25% | +0.25 percentage points |
February 2023 | 4% | +0.5 percentage points |
December 2022 | 3.5% | +0.5 percentage points |
November 2022 | 3% | +0.75 percentage points |
September 2022 | 2.25% | +0.5 percentage points |
August 2022 | 1.75% | +0.5 percentage points |
June 2022 | 1.25% | +0.25 percentage points |
May 2022 | 1% | +0.25 percentage points |
March 2022 | 0.75% | +0.25 percentage points |
February 2022 | 0.5% | +0.25 percentage points |
December 2021 | 0.25% | +0.15 percentage points |
March 2020 | 0.1% | -0.15 percentage points |
Will interest rates continue to fall in 2025?
Predictions right now are that we’ll see two more cuts in 2025, bringing it down to 4% by year end. The first of these is expected at the next meeting in May 2025, and the other later in the year, possibly September.
However, as is always the case with base rate predictions, not everyone agrees. Some economists think there could be another three or four this year. Another thinks there could be just one!
And from one month to the next expectations can very quickly change. That’s very much the case right now due to so much uncertainty across the globe, from continuing wars in Ukraine and Gaza, through to trade tariffs set up by Trump in the USA. The spectre of trade wars could mean more cuts are needed.
But throw in that the latest inflation rate in the UK is 3%, and expected to increase further to 3.75 in the autumn%, it means we’re well above the 2% the Bank wants us to be at – meaning they won’t necessarily want to reduce the base rate just yet.
And of course on top of this the general UK economic growth figures aren’t looking good. We’ve got the Spring Statement from Chancellor Rachel Reeves next week, and anything announced there could also have an impact on future decisions.
So, as ever, everything can change and none of this is guaranteed!
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When is the next interest rate decision?
The rate is set every six weeks or so by the Bank of England Monetary Policy Committee, a group of nine people, with the majority vote deciding whether the rate goes up, down or stays the same.
The next meetings will be on:
- 8 May 2025
- 19 June 2025
- 7 August 2025
- 18 September 2025
- 6 November 2025
- 18 December 2025



The base rate and inflation
The driver for changing the base rate right now is inflation, which has been higher than wanted since late 2021.
Increasing interest rates is seen as the key (perhaps only) way to battle inflation, the idea being we’ll save more or have more expensive debts (like mortgages), leading to us spending less. This will force suppliers to lower prices, which in turn will see the inflation rate drop (though in most cases that doesn’t mean prices fall, they just get more expensive at a slower rate).
However, those rate hikes take time to filter down and for the inflation rate to – in theory – come under control. And if you keep increasing rates the danger is it pushes the economy into recession and cause hardship for borrowers, particularly those with mortgages.
Likewise if the Bank decides to cut the rate too early, it might not have done enough, leading to a reverse later on.
How the base rate impacts your money
The BoE rate is a large part of what high street and online banks and lenders use to inform the rates they offer. This means it will impact the cost of borrowing on things like mortgages, loans and credit cards, but also how much you can earn on savings.
Sometimes it’s a direct correlation if you have a product with a tracker rate – something that literally changes up or down in line with the BoE rate. In that case you’ll see an instant change.
On other products you might not see an instant change – if at all. So it pays to shop around to see if you can get a better deal.
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How the decision impacts your savings
Since a peak in autumn 2023, rates have generally been falling as banks price in both actual and predicted cuts (they’re fast to pass these on, but slow to give us the increases).
No cut is good news in a way, as those on tracker rates won’t see any change. But of course, banks aren’t just thinking about the rate now, they’re looking at predictions for the short, medium and long term future.
So we could still see reductions to variable rate and fixed rate accounts.
The flip side is we’re in ‘ISA season’, which does tend to bring in competition from providers eager to get your business as you’re filling up your allowance or starting a new account in the next financial year.
Watch out though for short term bonuses pushing some accounts to the top of the lists to make them look better than they actually are. We’ve listed the best paying ISA rates in our ISA best buys table.



The highest-paying savings accounts – our picks
- 6% AER current account from Santander (limited to £4,000 deposit and has monthly fee)
- 7% AER regular saver from First Direct
- 4.8% AER easy access Cash ISA from Tembo
Read more about these and the other best savings accounts in our best buys guide
How the decision impacts your mortgage
The decision means existing tracker rate deals will stay the same. And if you’re already on a fixed-rate mortgage (which most people are) nothing will change – for the time being.
If you’re on your lender’s variable rate (SVR) or looking to get a new deal, you could actually see some changes, perhaps even an increase in what’s available.
This can be confusing to homeowners that despite the base rate being lower now compared to a year ago, average mortgage rates haven’t changed by the same amount. This is because while mortgages rates are directly based on the base rate. They’re actually influenced by something known as swap rates – effectively where they think the rate will be in the future.
So many longer term fixes will have priced in changes to the base rate on previous predictions, but if we’re expecting further cuts to take more time to come through, it could mean there’s not much movement downwards on new fixes for now.
However, longer term mortgage rates are still expected to decrease from where they are now, but don’t expect them to fall where they were just a few years ago.
It’s always worth speaking with a mortgage broker who can advise on different strategies – though since no one knows what will happen this still won’t guarantee any savings.
And anyone who is really struggling to make their repayments, it’s important to talk to your lender to see if anything can be worked out – though bear in mind missing payments can impact your credit report.
If it’s impacting other essential spending, then see whether those companies can support reduced repayments. And if debts have built up, speak to a debt charity.
How it impacts other borrowing
With this change to the base rate, you’re still unlikely to see much difference to the rates of your existing loans or new deals.
Regardless, makes sure you always try and go for 0% deals if you can get them, or to use your savings to pay for things or clear debts rather than take out new ones.
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If you have money given to you and its put you over the maximum threse hold
Both my house/contents insurance and dental plan have increased above the rate of inflation. With proposed increases in council tax, it may still be a few months before interest rates reduce.
Shawbrook bank have just notified me that the current variable rate on its instant access account of 4.99% will be reduced to 4.89% in March so it seems they are anticipating a base rate reduction then. Time to fix perhaps?
If you have a child, consider some of the children easy access savings accounts for a higher savings rate. These include Kent Reliance (3.01% up to £25k), Bath Building Society (2.5% up to £5k), Penrith (2.45% up to £10k), Leeds Building Society (2.25% up to £1m). I’ve placed cash in all of those, beats having it all stuck in Chase or Virgin Money!