Afin Bank Base Rate Comment

30 July 2026

Following today's base rate announcement from the Bank of England, Charles Resnick, Chief Finance Officer, Afin Bank, commented:

“The Bank of England remains in wait-and-see mode as the various economic and political developments play out, so a decision by the Monetary Policy Committee (MPC) to hold the Base Rate at 3.75% was always expected.

“We have a new Prime Minister and a new Chancellor, and while there hasn’t been any significant reaction to the appointments of Andy Burnham and John Healey, the market will be watching to see what policies are announced and how they will be funded.

“Pressure on households remains considerable, but while the Prime Minister has promised measures to help ease the cost-of-living burden, he has little fiscal headroom to do so, so initiatives announced so far have been modest and supposedly fully funded.

“Higher energy costs will hit customers later in the year, with inflation expected to rise towards 3.5% as a result. The MPC will then need to assess whether higher energy costs have fed into wages, prices and future inflation expectations before deciding about Base Rates, possibly at the November meeting.

“In the meantime, fixed-term savings deposit rates remain above Bank Rate, continuing to offer attractive returns for savers. For mortgage borrowers, lenders are likely to remain cautious as funding costs and mortgage rates remain high, while higher gilt yields and fiscal uncertainty should continue to support disciplined lender prices.”