Interest rates hold steady at 5.25% – what it means for savings, mortgages, and annuities

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The Bank of England have held rates at 5.25% for the fourth consecutive time. We look at what that means for investors.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 1 February 2024

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

The Bank of England (BoE) has held the base rate at 5.25% for the fourth time in a row.

With inflation ticking back up to 4% in December, it’s likely any immediate urge from policymakers to start cutting rates was cooled. But, right now, all attention is on the mood music from the BoE not just the rate decision. There was a slight shift in sentiment around the table. Instead of three decision makers voting to increase rates again, two voted for a rate rise and one for a cut.

Interest rate cuts are still being eyed for this year, but it appears they’ll take a bit more time to flush out. The BoE still thinks monetary policy would have to ‘remain restrictive’ for ‘an extended period of time’ until inflation is ‘sustainably’ at 2%.

The broader economic picture looks like it’s adding weight to the argument for cuts. Growth looks stagnant, and it’s