Frances Haque, Chief Economist at Santander UK responds to the MPC's base rate announcement

18 June 2026

Frances Haque, Chief Economist at Santander UK comments:

"The Monetary Policy Committee (MPC) had some leeway to hold bank rate today at 3.75% as they wait and see how the second-round effects from the conflict in the Middle East filter through the UK economy. Although the inflation data released on Wednesday held steady at 2.8%, the longer-term impact of the conflict and the closure of the Strait of Hormuz has yet to fully unwind, and will inevitably push up inflation as we move through the rest of the year."

"Looking forward, while both global and domestic uncertainty means the outlook remains challenging both for the economy and the housing market, the good news is, the risk of a hike in Bank Rate in 2026 has been much reduced. The mortgage market has been pricing down in recent weeks, with a growing number of sub 4% fixed-rate products entering the market, which should help improve affordability and reinstate confidence in borrowers looking to move home this year."