On 30th July the Bank of England’s Monetary Policy Committee will announce its next interest rate decision. With rates currently held at 3.75% and the economic picture shifting almost weekly, a lot of people are asking the same question — should I be doing anything with my money before then?
My view is that the MPC will hold rates at 3.75%. Here’s my reasoning, and more importantly, what I think it means for your finances.
The Case For A Hold
The inflation picture has improved meaningfully in recent weeks. CPI sits at 2.8% — still above the 2% target, but considerably better than where we were. The initial energy price spike driven by the Middle East conflict appears to be easing, and the US-Iran peace deal has taken some of the heat out of oil and gas markets.
More importantly, I don’t think the second round effects that the Bank feared — where higher energy costs feed into wages and then prices — are going to materialise in the way they might have in previous cycles.
The reason is simple. The labour market has weakened significantly. Private sector wage growth has slowed to just 2.9%, its lowest rate in more than five years. Job postings are down 13% on last year and sitting 32% below pre-pandemic levels. Youth unemployment has hit 16.2% — a decade high. In that environment, employees simply don’t have the bargaining power to push through the kind of wage demands that would embed inflation. The economy is too weak for that story to play out.
What This Means For Your Savings
This is where I’d encourage you to act now rather than wait.
If rates are held in July and the outlook continues to improve, savings rates will start to come down before the end of the year. The best easy access and fixed rate savings deals currently available reflect a market that still has some uncertainty priced in. Once that uncertainty clears, those rates will go with it.
My view — if you have money sitting in a low interest current account or a poor paying savings account, now is a genuinely good time to lock in a competitive fixed rate savings deal. Even locking in for 6 or 12 months at a decent rate beats sitting in an account earning next to nothing while you wait to see what happens.
Check the best buy tables on MoneySavingExpert or MoneySupermarket and compare what’s available. The difference between a poor savings account and the best available rate right now could be hundreds of pounds a year on a meaningful balance.
What This Means For Your Mortgage
This is more nuanced, and I want to be honest about that.
If you are coming up for renewal in the next few months, it is absolutely worth speaking to a mortgage broker now — not in September, not after the July decision, now. A good broker will be able to search the whole market, explain your options clearly, and help you understand what makes sense for your specific situation.
Whether you fix, go variable, choose a 2-year or 5-year deal depends entirely on your own circumstances — your income, your plans, your attitude to risk, and how much certainty you need on your monthly outgoings. There is no single right answer that applies to everyone, and anyone who tells you otherwise isn’t giving you the full picture.
What I would say is don’t leave it to the last minute. If your deal ends in the autumn, the time to be exploring your options is now.
To Sum Up
The July 30th decision is unlikely to bring drama. A hold at 3.75% feels like the most probable outcome given the data. But the direction of travel for rates by the end of 2026 is genuinely uncertain, and that uncertainty has real consequences for your savings and your mortgage.
The best thing you can do is review both now, understand your options, and make informed decisions rather than leaving things on autopilot.
Disclaimer: This blog is for informational and educational purposes only and does not constitute regulated financial advice. Please consult a qualified financial adviser before making any financial decisions.
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