Interest rates remain unchanged at 4%: how it could affect your money

The BoE has decided to hold the base rate at 4% on Thursday 6 November. 

Five members of the BoE's Monetary Policy Committee (MPC) voted for the base rate to be held at 4%, while the remaining four voted for a reduction to 3.75%.   

There was uncertainty over whether the base rate would be held or cut, with Goldman Sachs and Barclays recently forecasting a reduction.  

UK inflation remained unchanged in September at 3.8%. This surprised the market after an anticipated increase to 4% amid sluggish economic growth ahead of the Autumn Budget, which is expected to include significant tax hikes and spending cuts.  

The US Federal Reserve also cut interest rates for the second consecutive time, which may influence the BoE’s future decision-making.  

Looking ahead, the market believes a rate cut may happen at the final meeting of 2025 in December, but this is not guaranteed. Rates are expected to fall in 2026.  

How will mortgage rates be affected?   

Following the BoE’s decision, there should be no change for variable-rate mortgage holders.  

Rates on fixed-rate mortgage deals have been falling, but lenders are currently cautious due to concerns about the UK economy and the upcoming Budget.  

The average five-year fixed-rate mortgage rate is currently 4.48%, according to Rightmove.   

Fixed mortgage rates have been volatile recently, but the most competitive deals are under 4%. However, these are typically available to those with more equity in their home or a larger deposit.  

House prices in the UK have risen recently, but an annual forecast has been revised from 4% to 1%, according to Savills.    

It is more expensive than ever to buy your own home, as mortgage rates remain higher than in previous years.  

If you’re applying for a mortgage, there are criteria you must meet, including ensuring you can afford it, having a strong credit score, and clearing outstanding debt.   

A qualified mortgage broker can boost your chances of a successful application.  

How will savings rates be affected?   

Savings rates have dropped from a recent peak of over 6% to below 5%, but this is still higher than inflation.   

However, rates have been falling this year and may continue to do so, despite the base rate remaining unchanged this month.    

If you want to seek even higher rates, have long-term financial goals, and don’t need easy access to your cash, you should consider investing, but this comes with additional risk.  

While your investments can rise and fall in value, you may want to give yourself time to handle any possible volatility by investing for at least a few years.   

You can quickly match with a qualified financial adviser via Unbiased, who can help you with an investment strategy, review your existing portfolio, or advise on how to reduce your tax bill legally.   

What about annuities?   

Annuities are useful in retirement by offering a fixed income for life or a fixed period.   

Annuity rates have soared by nearly 10% in 2025, but they could still fall, so it’s worth considering one now.   

Unbiased can match you with a financial adviser who can help you find the best annuity for your circumstances.