Base Rate Held at 3.75%
The Bank of England has held the Base Rate at 3.75% as it remains cautious about the outlook. Inflation is falling but still above the 2% target, and rising energy prices could push it higher again.
The Bank is keen to avoid cutting rates too soon and reigniting inflation, while also recognising that keeping rates high for too long can slow the economy. If price pressures persist, rates may need to stay higher for longer—or even rise further—to bring inflation under control. For now, the decision offers some stability, but uncertainty remains.
Volatility Pauses Launch Of New Mortgage Products
Swap rates have risen sharply over the past week—by around 9% on average—following a similar 9% increase the week before. Markets are reacting to renewed inflation risks, with rising energy prices and global uncertainty leading investors to expect interest rates to remain higher for longer, or potentially increase. This has pushed up the cost of fixed-rate funding for lenders, driving rapid changes in swap rates and mortgage pricing. Due to this short-term volatility, many lenders have paused launching new products until conditions stabilise.
20th March Swaps
14th March Swaps
Review Your Mortgage Now?
The short-term outlook for mortgage rates remains reasonably favourable if you are planning to review your mortgage soon. However, if financial markets remain volatile and inflation continues to rise, lenders may start increasing their Standard Variable Rates, particularly if the Bank of England raises the Base Rate to help control inflation.
If your mortgage deal ends within the next 3–6 months, it may be sensible to review your options now. Securing a rate early can provide protection if lenders increase pricing further. At IMDNE, we continually monitor lender rates right up until completion. If a lower rate becomes available, we automatically secure the improved deal, ensuring you never miss out on better terms.
