LHV Bank comment: CPI Inflation rate falls to 3%
18 February 2026
Kris Brewster, Director of Retail Banking at LHV Bank
- The Bank of England has repeatedly misjudged inflation, costing consumers through higher mortgages and weaker savings returns.
- A March rate cut looks likely - good for mortgage competition, bad for savings rates.
- Savers in low-paying accounts risk losing spending power and should act fast.
"Since 2021, the Bank of England has badly let down UK consumers, failing to keep inflation in check. But could this be about to change with today’s drop?
"Despite January’s Bank of England review, citing volatility and poor oversight for years of forecasting mistakes, the conclusion is clear - the Bank keeps getting inflation wrong. And it’s the UK consumer who pays, with mortgage borrowers suffering a cost of living crisis while savers have watched returns on their cash fade with every cut to Base Rate.
"Today’s news makes the case for a March Base Rate cut clearer, and with signs of confidence in the mortgage and housing markets, we expect to see mortgage lenders price more keenly as the fight for customers heats up.
"On the flip side, expect to see savings rates slide further. Savers holding cash in a low-paying savings account will see their spending power come under fire. This is not a time for inertia or misplaced loyalty to 0% interest accounts. Savers need to act now to secure their cash."
