Bank of England Base Rate Announcement: 19th June 2025

The Bank of England’s MPC met once again today to discuss the base rate, or bank rate. It's their 4^th meeting of the year, and today they decided to keep rate as it is for another few weeks. Wondering exactly what it means for you? Well, you’re in the right place. Here’s five quick answers to your burning base rate questions. 

What happened with interest rates today?    

The Bank of England voted today that interest rates will hold at 4.25% - which it decreased to last month. The rate has been slowly making its way down since August 2024, and they’ve lowered it twice this year – in February and May. 

The financial markets have generally been predicting it’ll lower in 2025 – maybe even one or two more times. If it keeps dropping in increments of 0.25%, it could mean the rate will fall as low as 3.75% by the end of the year.  

Why did the rate hold?    

Here’s a bit of context. Every few weeks, the Bank of England reviews the base rate at their MPC (Monetary Policy Committee) meeting. It moves up and down, or stays the same, to help control inflation in the UK.    

Rates tend to rise as inflation goes up. A lower rate encourages people to spend their cash to help the economy grow. For reference, inflation is currently sitting at 3.5%, but the bank’s target is 2%. It’s a bit of a balancing act, as increasing the rate can impact economic growth, so there’s a few factors they consider when they vote. 

What does it mean for the housing market?    

There’s no way to know exactly, but the reasoning usually goes that higher interest rates are passed onto borrowers through higher mortgage rates. This can mean fewer people are looking to buy houses, meaning the price of homes could drop.   

So, the slow lowering of the rate earlier in the year is encouraging for new buyers, as mortgages will likely become slightly more affordable. This could bring up demand for houses, and maybe house prices. But there are lots of moving parts, so we’ll have to see. 

What does 'no change’ mean for my mortgage?    

In terms of mortgages, it probably means things are staying the same. The previous drop in May was good news for first-time buyers looking for a mortgage, as we’d also expect rates to drop slightly. If you already have a mortgage, and your rate is ‘fixed’, there won’t be any immediate change. Your rate will stay the same until your fixed term ends – whatever the interest rate does.   

If you’re on a tracker mortgage or a standard variable rate (SVR), you probably won’t see an immediate change either, as the monthly cost tends to move in line with the base rate. You could be affected by future Bank of England announcements, though, so it's good to stay tuned. 

And lastly, if your rate’s expiring soon, it’s good to talk to a lender or a broker — since the standard variable rate may be a lot more than what you're on now.  

What happens next time?     

We’d love to peek at that crystal ball and give you an idea, but it’s hard to say for sure. Some economists want the base rate cuts to be bigger or come faster to help protect UK jobs and growth. But like we said, people are widely expecting cuts in 2025, so although the interest rate held today, there could be more cuts to come.

Either way, whatever happens at the next meeting in August, we’ll be here to let you know the outcome. In the meantime, feel free to reach out – we’re here if you need us.