Pound slightly weaker against the US Dollar in early trading

The pound is slighter weaker than the US Dollar, down a third of a cent at around $1.3620.

At its lowest level in nearly two weeks, the pound has come under pressure ahead of the interest rate decision later today.

Harriette Boucher5 February 2026 08:31

How inflation rebound is set to affect UK interest rates

Interest rates are widely expected to remain at 3.75% as Bank of England policymakers prioritise curbing above-target inflation while also monitoring economic growth, according to expert analysis.

The Bank’s Monetary Policy Committee (MPC) is anticipated to leave borrowing costs unchanged when it announces its latest decision on Thursday, marking its first interest rate setting meeting of the year.

This follows a rate cut delivered before Christmas, which was the fourth such reduction.

At the time, Governor Andrew Bailey noted that the UK had “passed the recent peak in inflation and it has continued to fall”, enabling the MPC to ease borrowing costs. However, he cautioned that any further cuts would be a “closer call”.

Since that decision, official data has revealed that inflation unexpectedly rebounded in December, rising for the first time in five months.

Harriette Boucher5 February 2026 08:16

Getting a mortgage soon? It’s not just about interest rates

One of the big groups of people who will keep a keen eye on the rates decision is anyone getting, or renewing, a mortgage soon.

But the headline rate isn’t the only thing which matters when it comes to that decision, of course.

Aaron Shinwell, chief lending officer at Nottingham Building Society, explains why now might be a good time – and what else you need to look for.

“Mortgage rates are now 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.

“Small shifts in expectations around future base rate reductions are already influencing mortgage pricing and we anticipate modest downward movements in rates through 2026, which should help support demand.

“Getting the right mortgage isn’t just about chasing the lowest headline rate. Term length, overpayment flexibility and long-term affordability all matter. Engaging early with a broker can make a real difference whether that’s securing a mortgage offer now while keeping the flexibility to switch if better options appear before completion.” 

Karl Matchett5 February 2026 07:57

Will interest rates go down today? Key factors and 2026 predictions

The base rate – now at 3.75 per cent after being cut four times last year – impacts business, consumers and taxpayers through everything from mortgages to loans and savings, so what do experts foresee, both this week and beyond?

Here’s everything you need to know ahead of today, including the key factors which impact interest rates decisions.

Karl Matchett5 February 2026 07:48

Interest rates vote: Key details

A bit of detail then for what happens today and what to expect.

What: The MPC members vote whether to cut, hold or raise interest rates.

Who: There are nine members in the Monetary Policy Committee (MPC) and it’s “most votes wins” – last time out was 5-4 in favour of a cut, for example. Andrew Bailey, the BoE governor, is one of the nine.

Time: At midday the vote results and meeting minutes will be published.

What next: Often it can be the press conference afterwards, or the detail within the written vote explanation, which can give the greatest insight as to what might happen in future: caution, what they want to see in economic data, expectations and so on.

Karl Matchett5 February 2026 07:29

Base rate, bank rate….interest rates

Today you’ll see variations of the same thing: what we typically call the interest rate. Officially it’s the Bank Rate (the rate the Bank of England sets) and it’s what the BoE itself calls the “core interest rate”.

You might also see the term “base rate”, which again is the same thing: all other banks and building societies base their rates off the bank rate.

So here’s how we got to 3.75 per cent over the past few years:

Note the quarterly reductions over the past year and a half, bringing us down from the high of 5.25 per cent.

(Bank of England)

Karl Matchett5 February 2026 07:25

Bank of England set for first vote of 2026 on interest rates

Good morning all and welcome to The Independent’s live coverage of the run-up to the Bank of England’s first interest rates vote of 2026.

We had four cuts last year, bringing the base rate down to 3.75 per cent – good news for those renewing their mortgage deals after a couple of years at much higher levels, but not such good news for savers seeking higher returns on their cash.

All the details coming up, plus the reaction after the vote itself.

Karl Matchett5 February 2026 07:08