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

30 July 2026

Frances Haque, Chief Economist at Santander UK said:

"Today's decision to keep rates on hold reflects the Bank of England's caution, as it looks for further evidence that inflation is on track to return to its 2% target. While inflation has fallen faster than expected in recent weeks, uncertainty around energy prices and the wider global outlook means that the Monetary Policy Committee need to continue to monitor the situation and its impact on the UK economy closely.

"Although both global and domestic challenges remain, there certainly seems to be signs of cautious optimism trickling into the mortgage market. More borrowers are choosing to play the waiting game, with growing interest in tracker mortgages as customers hope to benefit from any future reductions in borrowing costs.

"Generally, this "wait and see" approach is here to stay, with our latest forecasts assuming no further cuts to Bank Rate in 2026. However, as inflation is expected to fall back as we enter into next year, we should see two further cuts 2027."