Base rate remains at 3.75%: what a sixth hold means for your finances

December's quarter-point cut, from 4% to 3.75%, has been the last move in either direction for a while. But the votes behind the recent holds tell you which way the pressure is building.  

The Monetary Policy Committee (MPC) split six in favour of holding, with three members voting for an increase to 4%.  

Continued volatility in Middle East energy markets has kept wholesale costs unpredictable, with today’s decision coming amid surging oil prices. Experts say the BoE needs to be ready to raise rates if energy prices keep rising.  

In early September, BoE Governor Andrew Bailey said the central bank had no "secret plan" to raise interest rates this year, unless the ongoing climb in oil prices driven by the war in the Middle East translated into more lasting domestic price pressures. 

Inflation has also been knocked off course. After easing to a 15-month low of 2.6% in June, CPI rebounded to 2.9% in July and up to 3.1% in August.   

Here's how a continued hold filters through to your money. 

If you have a mortgage 

If you’re on a tracker or variable deal, a hold means your payment doesn't shift, though it will follow Bank Rate whenever the MPC finally moves, in either direction. 

Fixed-rate borrowers are shielded until their current deal ends. However, fixed pricing doesn't move in lockstep with the base rate; lenders set it against swap rates and gilt yields, and both have crept higher as markets price in rates staying put for longer.  

This means deals available to new borrowers and remortgagers have quietly been getting more and more expensive. 

According to Rightmove, the average two-year fix is around 5.39%, and the average five-year fix is also 5.39%.  

The base rate still sets the backdrop for every new deal, so the climate when your fix expires will shape what you pay next. If you're within roughly six months of that point, start comparing now, not later.  

A mortgage broker can scan the whole market for you and improve the odds of your application being accepted. 

If you're building up savings 

As the prospect of cuts has receded, providers have edged rates upwards.  

Among the more competitive rates on the market, according to MoneySavingExpert: 

• Easy-access accounts: up to around 5%

• One-year fixed bonds: up to around 5%  

• Easy-access cash ISAs: around 4.63% AER 

Saving isn't the only option, of course.  

If you can leave money untouched for the longer term and ride out some ups and downs, investing offers the potential for stronger returns — with the trade-off that your capital can fall as well as rise.  

It's an area where tailored advice tends to pay for itself: Unbiased can match you with a financial adviser to build a strategy, review an existing portfolio, or plan around your tax position. 

If you're planning for retirement 

A settled base rate also tends to keep annuity rates steady.  

An annuity turns your pension pot into a guaranteed income for life. 

Rates are hovering near an 18-year high.  

However, gilt yields move daily, meaning the leading rate can swing by around a percentage point within a week.  

As the rate you take is locked in for life, if you’re considering an annuity, comparing the whole market first is essential. 

Where to go from here 

When the outlook is this unsettled, a plan beats guesswork.  

A qualified financial adviser can weigh up your whole position — mortgage, savings, pension and tax together — and build around your goals rather than the day's headlines.  

Unbiased can connect you with a financial adviser to help you decide your next move with confidence.