The Bank of England has held the base rate at 3.75% in a tighter-than-expected 5-4 vote, with four MPC members pushing for a cut. The narrow split surprised markets, which had anticipated a clearer 7-2 hold, and strengthened expectations that the next reduction could come as early as March or April.
MPC split signals rate cuts ahead
The nine-member Monetary Policy Committee voted 5-4 to maintain the current rate, a notably closer call than the 7-2 split economists polled by Reuters had predicted. Four members voted for a 25 basis-point cut, suggesting growing momentum toward easing.
The BoE said monetary policy was being set to ensure inflation “not only reaches 2% but remains sustainably at that level in the medium term.” It added: “On the basis of the current evidence, Bank Rate is likely to be reduced further,” but cautioned that “the extent and timing of further easing will depend on the evolution of the outlook for inflation.”
The Bank also downgraded its UK growth forecast for 2026 from 1.2% to 0.9%, and for 2027 from 1.6% to 1.5% – a signal that the economy is weaker than previously assessed.
Consumer Prices Index inflation rose to 3.4% in December, driven by tobacco duties and airfares. The Bank views these factors as temporary but sufficient to justify holding steady for now.
What the hold means for buy-to-let mortgage rates
Simon Gammon, managing partner at Knight Frank Finance, said the 5-4 split was a positive sign for borrowers. “Strong economic figures released over the past fortnight had prompted many of the larger lenders to raise mortgage rates in recent days, but this decision should reinforce a period of pricing stability,” he said.
“The best fixed rates have not moved higher and still sit at around 3.5%. Rates are already low enough to support a gradual recovery in activity, with borrowers broadly comfortable at current levels.”
Aaron Shinwell, chief lending officer at Nottingham Building Society, said: “Mortgage rates are now at their lowest levels since 2022, creating real opportunities for anyone looking to buy or remortgage.” He added that 1.8 million borrowers are expected to remortgage this year.
Research published this week by Paragon Bank showed £49.7 billion in buy-to-let mortgages will mature during 2026, with almost four in ten landlords planning to refinance within the next 12 months.
When is the next cut?
Andrew Wishart, senior UK economist at Berenberg, said: “The early data covering 2026 hint at stronger demand and stickier inflation than we had expected. In time, fiscal tightening and decelerating pay growth will snuff out excess price pressures, but not as soon as we anticipated.” Berenberg now expects the next cut at the 30 April meeting.
Edward Allenby, senior UK economist at Oxford Economics, agreed: “The current bout of mild stagflation is likely to keep the committee divided on the timing of future cuts, encouraging a gradual approach.” He also pointed to April as the most likely timing.
BNP Paribas Markets 360 economist Dani Stoilova took a more bullish view, saying: “We continue to expect the next rate cut in March. After that, we think the BoE will deliver a prolonged pause before resuming policy normalisation in early 2027.”
The next MPC meetings are 19 March and 30 April. Markets are now pricing in a stronger chance of a March move following the unexpectedly close vote.
Editor’s view
A 5-4 vote is as close as it gets without a cut. For landlords sitting on maturing deals, the message is clear: rates have peaked and the direction is down, but the glide path will be gradual. With £49.7 billion in buy-to-let mortgages coming up for renewal this year, waiting for the perfect rate is a gamble. Review your numbers now and act when they work.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 5 February 2026
Sources: Bank of England, Knight Frank Finance, Berenberg, Oxford Economics, BNP Paribas, Nottingham Building Society, Paragon Bank
Related reading: Buy-to-let refinancing wave looms as £49.7bn in mortgages mature
