The Bank’s Monetary Policy Committee (MPC) voted 5-4 to keep base rate at its current level.

The decision to hold base rate was because the majority of MPC members thought it was too risky to make a cut with CPI inflation running at 3.4% in December 2025, up from 3.2% in November.

Andrew Bailey, Megan Greene, Clare Lombardelli, Catherine Mann and Huw Pill voted to keep base rate at 3.75%. Four members recommended a cut of 25bps, to 3.5%, namely Sarah Breeden, Swati Dhingra, Dave Ramsden and Alan Taylor.

The next decision will take place on 19 March, with most analysts expecting a cut to 3.5%.

The Bank of England said: “On the basis of the current evidence, Bank Rate is likely to be reduced further. Judgements around further policy easing will become a closer call.”

The mortgage and property markets said they had expected the Bank’s decision, as cuts to base rate were more practical later in the year.

OnTheMarket president Jason Tebb said: “As expected, the Bank of England held interest rates at 3.75%. With inflation rising to 3.4% in the year to December, caution prevailed this time around with the rate setters adopting a ‘wait and see’ approach, although the vote was split with four of the nine members voting for a 0.25bps reduction.”

MT Finance director Joshua Elash said: “While further cuts are expected later this year, it is not surprising that bank rate has been held at 3.75% this time around.

“The news that UK inflation rose in the 12 months to December 2025 effectively shut down the possibility of a drop in February, particularly as the US Federal Reserve also voted against a decrease last week.

“There is still an appetite to lend though, and we are hopeful that in the absence of any rate increases, borrowers will continue to transact.”

Fleet Mortgages chief commercial officer Steve Cox said: “Today’s decision by the Bank of England to hold Bank Base Rate at 3.75% comes as no surprise, particularly after inflation edged up slightly to 3.4% last month.

“With a cut already delivered in December, and the Bank keen to avoid moving too quickly, this pause was widely expected. That said, the broader expectation is still for inflation to fall through the year, which could pave the way for two or possibly three cuts to base rate during 2026, potentially taking us down to 3% by the end of the year.”

Nottingham Building Society chief lending officer Aaron Shinwell said: “With the bank of England confirming a hold at 3.75%, mortgage rates remain at their lowest levels since 2022, creating real opportunities for anyone looking to buy or remortgage.

“Rates have already passed their peak and could gradually edge down over time, which good news for the 1.8 million borrowers expected to remortgage this year and first-time buyers finding a more realistic route onto the property ladder.”