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Bank of England holds interest rates steady this week

The Bank of England is widely expected to keep interest rates on hold at this week’s rate-setting meeting, which is good news if you’ve been dreading another increase to your mortgage payments or savings account disappointment.

Here’s what you need to know about what’s happening and why it matters to your wallet.

Why rates matter to you

Interest rates affect almost every household in the UK. If you have a mortgage, a higher rate means higher monthly payments. If you’re saving, higher rates mean better returns on your cash savings and ISAs. The Bank of England sets the “base rate”, which is the foundation that lenders use to decide what to charge you.

What’s expected this week

The Bank’s monetary policy committee meets regularly to decide whether to change rates. The expectation that they’ll hold steady this week suggests they’re pausing their rate-hiking cycle — at least for now. This is positive if you’re struggling with mortgage costs or concerned about further financial pressure on your household budget.

The bigger picture

The article hints at concerns about future tax rises coming in the autumn, which could add to the financial pressure on British households. Tax changes alongside interest rate decisions are crucial for personal budgeting, as they affect both what you earn and what you owe.

What you should do

If you’re on a variable-rate mortgage, a pause in rate rises gives you breathing space. Use it to review your household budget and consider whether you’re overpaying on debts or could boost your savings.

If you’re saving, remember that savings rates offered by banks often lag behind base rate changes, so shop around for the best ISA or savings account rates rather than assuming your current provider is competitive.

Keep an eye on autumn announcements from the Chancellor for any tax or benefit changes that could affect your personal finances.

For the latest on interest rate decisions, follow the Bank of England’s official announcements at bankofengland.co.uk.