BROKERS have said the closer than expected vote split at this week’s Bank of England (BoE) rate decision and an apparent confidence among policyholders that inflation will be back to around target from April could see “a reversal of this week’s rate increases” from major lenders.
One said: “Lenders have been edgy over the past week or so but we could now see Swap rates, which determine the pricing of fixed rate mortgages, start to edge down again.” But while this is good news for borrowers, a money expert warned savers that “the direction of travel is clear”.
At its meeting ending on 4 February 2026, the Monetary Policy Committee (MPC) voted by a majority of 5–4 to maintain Bank Rate at 3.75%. Four members voted to reduce Bank Rate by 0.25 percentage points, to 3.5%.
The Bank of England said that while inflation is above the 2% target currently, it is expected to fall back to around the target from April, owing to developments in energy prices including from Budget 2025.
Crucially, it added that, on the basis of current evidence, Bank Rate is likely to be reduced further, caveating that the extent and timing of further easing in monetary policy will depend on the evolution of the outlook for inflation.
Exactly what the doctor ordered
Brokers and property experts were upbeat about the announcement and accompanying minutes, suggesting the Bank’s dovish tone and vote split could see mortgage rates once again start to edge down.
Shaun Sturgess, Director at Swansea-based mortgage broker, Sturgess Mortgage Solutions, said: “A closer than expected vote and dovish minutes, with policymakers seemingly confident that inflation will be back to target soon, is exactly what the doctor ordered for borrowers.
“Lenders have been edgy over the past week or so but we could now see swap rates, which determine the pricing of fixed rate mortgages, start to edge down again.”
Chris Barry, Director at Thomas Legal, a nationwide conveyancing firm, also said the vote was much closer than many anticipated.
He continued: “This data does hint that when inflation starts to play ball, as the Bank expects it to, we could quite easily see another rate cut and in the not-too-distant future. The timing could be perfect if this takes place in the usually busy spring property market”.
Tony Redondo, Founder at Cosmos Currency Exchange, said “the era of hikes is over, the era of timing the next cut has begun”, adding “the dovish hold signals the Bank of England is on the brink of a pivot”.
He continued: “While a hold at 3.75% was the consensus, the razor-thin majority suggests a regime shift is imminent. A Spring base rate cut is now firmly on the cards.
“By highlighting April’s inflation target return, the BoE has set a clear ‘data trigger’. If April data confirms this cooling, a May cut is the base case, though March remains a live possibility.”
Vote bodes well for borrowers
Babek Ismayil, CEO at homebuying platform OneDome, said the vote split bodes well for borrowers: “A hold from the Bank of England was expected but the closeness of the vote and the Bank’s apparent confidence that inflation will be back around target in a couple of months bodes well for borrowers.
“It will be interesting to see how Swap markets react to this announcement, but there is every chance they may edge down, which could see mortgage rates follow suit.”
Jack Tutton, Director at SJ Mortgages, agreed: “The fact that the vote was so close will prompt the markets into thinking that a further cut to the base rate is coming sooner than thought. In turn, we could start to see mortgage rates falling again in the coming weeks.”
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, said the cut could see lenders backtrack: “This close vote, perhaps closer than many were expecting after the rise in inflation, could see a reversal of this week’s mortgage rate increases.
“The Bank of England seems confident that inflation will be back around target from April and that is promising for a cut in the Spring, which will help borrowers around the country.”
Rolling the dice
But one broker was less convinced. Rohit Kohli, Director at The Mortgage Stop, said: “The close split is a clear warning for borrowers banking on continuous cuts. A 5-4 vote is tight by MPC standards and shows how fragile the outlook remains.
“Inflation may drift back towards 2% on forecasts, but it has been stubborn, and it would not take much — from energy prices to fiscal shifts — to push it off course.
“We already have clients who held off in early January when rates were falling, expecting further reductions. Some are probably now going to regret that decision. Rates have edged back up and those borrowers are scrambling to secure deals at higher levels than were available weeks ago.
“A further wait-and-see approach ahead of the next MPC meeting could prove costly. Not everyone will want to roll the dice on that.”
Meanwhile, Antonia Medlicott, Founder & MD at Investing Insiders, warned savers about what looks set to come.
She said: “The closeness of this vote shows that the direction of travel is clear. Savers should act now to ensure they’re not repeating the same mistake too many UK savers did last year when they lost billions in purchase power by leaving their money in accounts paying below-inflation interest rates.
“Be prepared to look online for the best rates, as the high street is rarely where you’ll find them.”
Photo by Ussama Azam on Unsplash
