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

05 November 2026

Frances Haque, Chief Economist at Santander UK comments:

"For homeowners, the immediate impact of today's increase will be felt most by those on tracker and variable-rate mortgages, with those coming off fixed-rate deals facing continued uncertainty over the coming months. We may see higher borrowing costs impacting affordability and with that, some slowdown in market activity, with last week’s Bank of England data already showing mortgage approvals easing in September. That said, buyers who are in a position to proceed may have more room to negotiate.

"The key question is whether today's decision is a precautionary move or the start of further increases from the MPC. With energy prices facing further increases, inflation expectations rising and wage growth stagnating at levels above those consistent with the 2% target, it certainly looks as if further hikes will feature in 2027. However, the question about how the economy reacts to all of this will be critical; the resilience it has shown so far has been remarkable, but the tension is mounting. For the time being, homeowners should prepare for borrowing costs to remain elevated.”