The Bank of England's Monetary Policy Committee (MPC) voted unanimously to hold the base rate at 3.75% at its March 2026 meeting. A cut had been widely expected just weeks ago. The conflict in the Middle East changed everything. This article explains what happened, why fixed mortgage rates are already rising, and exactly what you should do now if you have a mortgage
Mar 19, 2026
As recently as the start of March 2026, most economists and market analysts expected the Bank of England to cut its base rate at today's meeting. The February hold had been decided by a narrow 5-4 vote, with four members actively pushing for a cut. A reduction to 3.50% felt likely.
Then the US and Israel launched military strikes on Iran. The Strait of Hormuz, through which around one fifth of the world's oil and gas supply flows, was effectively blocked by Iranian forces. Energy prices spiked sharply. Swap rates, which underpin the pricing of fixed-rate mortgages, jumped. Within days, lenders including Halifax, Santander, Barclays, HSBC and Nationwide had all announced rate increases.
By the time the MPC met this week, the picture had changed completely. All nine members voted to hold rates, citing the risk that soaring energy costs would push inflation back up towards 3.5% by summer, well above the Bank's 2% target.
Governor Andrew Bailey was careful not to overreact to what could prove to be a short-term shock. He cautioned against drawing strong conclusions about rate rises, and said the right place for policy to sit right now is on hold. But the door to a rate rise later in 2026 is now open, something that was not even being discussed a month ago.
The most important thing to understand is that mortgage rates do not wait for the Bank of England to act before they move. Fixed-rate mortgage pricing is based on swap rates, which reflect what markets expect interest rates to do in the future. As the outlook shifted, swap rates jumped and lenders repriced almost immediately.
Here is how the key rates have moved since the start of February 2026:
The cheapest 2-year fixed deals, which dipped below 3.5% in January 2026, have now risen above 4.14%. Sub-4% fixed deals have almost entirely disappeared from the market. As one mortgage broker told the BBC this week, a best-buy 2-year deal went from 3.9% to 4.2% in 24 hours, and then to 4.6% the day after because demand was overwhelming supply.
Tracker mortgages are currently the cheapest product on the market, with the best 2-year tracker sitting at around 3.94% from Nationwide. For the first time since October 2023, trackers are cheaper than the best fixed deals. However, as experts have warned, if the conflict persists and a rate rise materialises, tracker holders
The average standard variable rate (SVR) in March 2026 remains around 7.15%. If your current deal has ended and you have rolled onto your lender's SVR, you are almost certainly paying significantly more than you need to. Getting onto a new deal as soon as possible is important regardless of where the market is heading.
If you are on a tracker or standard variable rate, today's hold means your payments will not change as a direct result of the Bank's decision. No immediate change.
If you are on a fixed-rate deal, nothing changes until your current term ends.
Where it matters is when your deal expires and you come to remortgage. If you were hoping to move onto a cheap fix this spring or summer, the deals available are now noticeably more expensive than they were in January. Here is how a 0.5% increase in your rate translates to real money:
This is the question every mortgage holder in the UK is asking today. The honest answer is that nobody knows, and anyone who tells you otherwise is guessing.
Here is where the key forecasters stand as of today:
Governor Bailey said the right place for policy to be is on hold while the MPC monitors how the conflict develops. The UK economy is weak. GDP was flat in January 2026, unemployment is at 5.2%, and wage growth has slowed to its lowest rate in five years. Hiking rates into a slowing economy is something the Bank will be reluctant to do.
The National Institute of Economic and Social Research has modelled a scenario where, if energy costs stay elevated for a full year, the base rate could climb to 4.5%. Markets are now pricing in the possibility of a rate rise to 4% by September 2026. MPC member Catherine Mann has already stated publicly that the balance has shifted, in her view, away from further cuts and towards a potential hike at some point.
Nicholas Mendes of broker John Charcol put it well: if this proves to be a temporary spike and underlying inflation continues to soften, cuts later in the year are still possible. The domestic economy is not strong. The Bank will not want to keep policy too restrictive for too long if growth continues to weaken.
The next MPC meeting is on 30 April 2026. By then, the Bank will have more inflation data, more clarity on the energy market, and a clearer picture of how long the conflict may last. That meeting is the next major decision point.
The right action depends on where you are in your mortgage journey. Here is our clear, straightforward guidance for each situation.
This is the most urgent situation. Rates have already risen sharply and could move further. You can lock in a new deal up to 6 months before your current term ends. Do that now. If rates improve before you complete, a good broker can move you to a better deal. If rates rise further, you will have protection.
This is not about panic. It is about having a plan. Locking in a rate while keeping it under review is the sensible approach right now.
Get in touch with us today and we can comapre the market based on your situation and advise on how to move forward.
Keep watching the market. Set a reminder for when you are 6 months out and speak to a broker at that point. Do not assume the market will have calmed down by then. Have the conversation early.
Trackers are currently the cheapest product on the market, but they carry risk. If the base rate rises, your payments rise with it. Think about how much your budget could absorb if rates went up by 0.25% or 0.50%. If that would be a problem, locking into a fixed rate now might give you peace of mind, even if the headline rate is slightly higher.
The average SVR is 7.15% against the best fixed deals at around 4.14% to 4.24%. On a £200,000 mortgage, moving off an SVR to the best available fixed rate could save you over £400 a month. Speak to a broker today to see what the best option for your situation.
The key message from the industry this week is not to panic. Ben Thompson, director at the Mortgage Advice Bureau, said it well: focus on understanding your options rather than rushing into decisions. The rates available today, while higher than January, are still meaningfully lower than where they were two years ago. If the property is right and the payment is affordable, that remains true.
If you are newer to mortgages, here is a simple explanation of why this decision affects you.
The Bank of England base rate is the interest rate the Bank charges commercial banks, building societies and other financial institutions to borrow money. Those institutions then use this rate as the foundation for pricing their own products, including mortgages and savings accounts.
When the base rate is low, borrowing is cheaper and saving earns less. When the base rate is high, borrowing costs more and saving earns more. The Bank uses it as its main tool to control inflation.
Inflation is currently at 3.0%, against the Bank's 2% target. The Bank expects inflation to rise towards 3.5% this summer as higher energy costs filter through into fuel bills, food prices, and business costs. Raising the base rate is one way to dampen this by making borrowing more expensive and encouraging people to save rather than spend.
Fixed-rate mortgages, however, do not move directly with the base rate. They move with swap rates, which reflect what markets expect interest rates to do over the coming years. This is why fixed mortgage rates have already risen sharply even though the base rate has not moved today.
Nobody can say with certainty. Much depends on how long the conflict in the Middle East lasts and whether energy prices remain elevated. If the situation de-escalates quickly, rate cuts could return later in 2026. If energy prices stay high and inflation rises further, the base rate could increase. The safest strategy for anyone with a mortgage is to lock in a rate now and keep it under review.
Not immediately. Tracker mortgages move with the base rate, which was held at 3.75% today. If the base rate rises at a future MPC meeting, tracker payments will increase. If it is cut, they will fall. The next MPC meeting is 30 April 2026.
Yes, almost certainly. The average SVR is 7.15%, which is significantly higher than the best available fixed deals. On a typical mortgage balance, being on an SVR versus the best fixed rate costs hundreds of pounds a month. The current market uncertainty makes it even more important to sort this out rather than waiting.
As of 19 March 2026, sub-4% fixed deals have almost entirely disappeared from the market. The best available 2-year tracker is around 3.94%, but trackers carry the risk of rate rises. The best available fixed rates start at around 4.14% for a 2-year fix and 4.24% for a 5-year fix. These figures change daily. Speak to a broker for the most current information.
There is no single right answer. A 2-year fix gives you more flexibility and the chance to remortgage to a potentially lower rate sooner if the market calms down. A 5-year fix locks in certainty for longer and protects you if rates rise further. Your decision should be based on your personal circumstances, budget, and appetite for uncertainty. A broker can run the numbers for both options based on your specific situation.
The next MPC meeting is scheduled for 30 April 2026. Further meetings are set for 17 June, 6 August, 18 September, 6 November, and 17 December 2026.
Despite the rate volatility, buying conditions are not dire. Mortgage rates, while higher than January, are still well below the 6% levels seen in 2022 and 2023. If you have found the right property, your deposit is in place, and the monthly payment is affordable, the market timing argument becomes less important. What matters most is whether the numbers work for you personally.
At Mortgage Brokers Near Me we are an FCA-regulated, whole-of-market mortgage advisor. In a fast-moving market like this one, getting the right advice from someone who knows the full landscape makes a real difference.
With access to over 90 lenders to find the best deal available for your specific situation.
We can lock in a rate for you today and monitor the market in case a better deal appears before you complete.
Your first conversation is completely free and there is no obligation.
Get in touch today.
Mortgage rates in 2026 could drift lower, but expecting a clean, straight-line drop is wishful thinking. Lenders price in expectations early, inflation surprises still move markets fast, and your “best” move depends more on your deal end date, your deposit or equity, and your risk tolerance than on any headline forecast.
Read ArticleThe Bank of England's Monetary Policy Committee (MPC) voted unanimously to hold the base rate at 3.75% at its March 2026 meeting. A cut had been widely expected just weeks ago. The conflict in the Middle East changed everything. This article explains what happened, why fixed mortgage rates are already rising, and exactly what you should do now if you have a mortgage
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