September 18, 2025: BoE Holds Rate at 4.00%
The Bank of England (BoE) held the UK base rate at 4.00% during its September 18, 2025 Monetary Policy Committee (MPC) meeting, opting to pause its easing cycle amid persistent inflation concerns.
The vote was 7–2, with two members preferring a 0.25% cut to 3.75%. This decision follows a 0.25% rate cut in August and comes as UK inflation remains elevated at 3.8%, nearly double the BoE’s 2% target.
The MPC noted that while the economy is weakening, more evidence of easing price pressures is needed before further cuts can be justified.
Quick Summary
- Latest Decision: Bank Rate held at 4.00%
- Vote Split: 7–2 to pause
- Next Meeting: November 6, 2025
- Announcement Time: 12:00 PM UK time / 11:00 UTC
What Is the Current UK Base Rate?
As of September 18, 2025, the BoE’s Bank Rate is 4.00%. This follows a series of gradual cuts earlier in the year:
- February: 4.50% (from 4.75%)
- May: 4.25%
- August: 4.00%
The September pause marks a shift toward caution as inflation remains well above target.
2025 BoE Rate Decisions Recap
| Date | Decision | Bank Rate |
|---|---|---|
| 6 February 2025 | Cut by 0.25% | 4.50% |
| 20 March 2025 | Held | 4.50% |
| 8 May 2025 | Cut by 0.25% | 4.25% |
| 19 June 2025 | Held (6–3 split) | 4.25% |
| 7 August 2025 | Cut by 0.25% | 4.00% |
| 18 September 2025 | Held (7–2 split) | 4.00% |
When Are the Remaining 2025 BoE Meetings?
- 6 November 2025
- 18 December 2025
Each decision is announced at 12:00 PM UK time, followed by the release of minutes and, when applicable, an updated Monetary Policy Report.
UK Interest Rate Outlook: What’s Next?
Forecasts remain divided. Here’s what economists are saying:
- Deutsche Bank: One more cut in late 2025 (likely December), and two more in 2026—possibly reaching 3.25%by summer 2026.
- Michael Saunders (ex-MPC): No further cuts in 2025; next move likely in early 2026.
- Others (e.g., Fidelity, Charles Stanley): No cuts until 2026; some suggest the next move could even be a hike if inflation persists.
Overall, markets expect the BoE to stay cautious, monitoring inflation and wage data closely. The prevailing stance remains “gradual and data-dependent.”
Factors Influencing the BoE’s Next Moves
1. Inflation Trends
Inflation remains above the 2% target. Food and energy prices continue to drive elevated costs.
2. Labour Market & Growth
Weakening GDP and rising unemployment signal economic cooling, but strong wage growth could fuel inflation.
3. Fiscal Policy
Government tax and spending decisions (e.g., the Autumn Budget) could sway BoE direction.
4. Global Factors
External risks like oil price volatility, U.S. monetary policy, and bond market instability (including BoE quantitative tightening) play a role in shaping decisions.
Why BoE Rate Decisions Matter
If Rates Decrease:
- Mortgage and loan payments drop
- Business borrowing becomes cheaper
- The pound may weaken (raising import costs)
If Rates Increase:
- Loans and mortgages become more expensive
- Inflation cools due to reduced demand
- Risk of economic slowdown rises
BoE policy choices directly affect borrowing, saving, investment, and currency values across the UK economy.
How Interest Rates Help Control Inflation
The Bank of England uses the base rate to influence inflation by:
- Reducing borrowing: Higher rates make mortgages and loans costlier
- Slowing demand: Less borrowing and more saving lowers consumer and business spending
- Easing price pressure: With demand lower, inflation tends to fall
When inflation is low, the BoE can lower rates to stimulate growth. The challenge is finding a balance that avoids overheating or stalling the economy.
Interest Rate Impact: Mortgage Example
| Mortgage Size | Rate | Monthly Payment |
|---|---|---|
| £130,000 | 1.5% | ~£520 |
| £130,000 | 2.5% | ~£583 |
| £130,000 | 3.5% | ~£651 |
Even a 1% increase in rates can add £68/month to your mortgage—more than £800 per year.
Borrowers should consider how rate changes might impact their repayments and explore fixed-rate options when appropriate.
Full List of 2025 MPC Meetings
| Date | Meeting Outcome |
|---|---|
| 6 February 2025 | Cut to 4.50% |
| 20 March 2025 | Held at 4.50% |
| 8 May 2025 | Cut to 4.25% |
| 19 June 2025 | Held at 4.25% |
| 7 August 2025 | Cut to 4.00% |
| 18 September 2025 | Held at 4.00% |
| 6 November 2025 | Upcoming |
| 18 December 2025 | Final meeting of the year |
Business Insight: How to Hedge Against Rate Volatility
Businesses with interest rate or currency exposure should consider:
- Forward contracts: Lock in exchange rates ahead of rate moves
- Interest rate swaps or caps: Stabilize borrowing costs on variable loans
- Scenario planning: Budget for potential rate increases or cuts
Strategic planning helps firms manage costs and reduce financial uncertainty.
Recap: Next BoE Rate Decision
- Date: Thursday, November 6, 2025
- Time: 12:00 PM (UK time)
- Bank Rate: Currently 4.00%
The MPC will weigh updated data on inflation, growth, and fiscal developments. The outcome may determine whether the easing cycle resumes—or remains on pause heading into 2026.
Stay Informed
Bookmark this page for updates on UK interest rate decisions. The BoE’s policy direction impacts mortgages, loans, savings, currency strength, and overall financial planning.