MPC cuts Bank Base Rate to 3.75%; Commentary from Kris Brewster, Retail Director at LHV Bank

18 December 2025

Kris Brewster, Retail Director at LHV Bank said:

"As CPI inflation dropped to a lower than expected 3.2% yesterday, the lowest number for eight years, this opened the door for the MPC to vote in favour of a cut to 3.75%.

"This will be a boost for the property and mortgage markets before the start of a new year as loans potentially become more affordable, but savers face a bigger battle to protect their incomes and spending power in the face of frozen income tax thresholds and the higher cost of living overall.

"To beat sticky inflation, consumers must protect their cash by shopping around ready to switch to current account rates delivering inflation beating rates, rewarding customers for their loyalty in a market that so often returns so little on day-to-day money. With Moneyfacts data suggesting one in four savers have never switched accounts, consumers must get out of their comfort zone to beat the downward trajectory of Base Rates predicted over 2026 and lock in higher returns with a top ranked provider now."