The base rate affects the interest that is applied to mortgages, loans and saving accounts and is reviewed every six weeks by the Bank of England12:00, 18 Jun 2026Updated 12:27, 18 Jun 2026The Bank of England has held interest rates at 3.75% but warned inflation is still set to rise again because of higher energy prices.‌Bank governor Andrew Bailey said it was good news that oil prices have dropped in recent days, following an interim peace deal between the US and Iran, but warned that energy bills are still set to increase this winter.‌However, policymakers lowered their overall inflation forecast. The Bank of England had expected inflation could peak at around 3.6% by the end of the year, but it now expects it to reach 3.25%.‌Mr Bailey said: “We’ve held bank rate at 3.75% today. Oil prices have fallen in recent days, and that’s encouraging. But they’re still higher than before the war.“Whatever happens in the future, the higher energy prices of the past four months mean there’s already some inflationary pressure in the pipeline.”‌It marks the fourth time in a row where the base rate has been left unchanged, in a move that was widely expected by the majority of economists.The Bank of England monetary policy committee (MPC) voted seven-to-two in favour of keeping the base rate at 3.75%. Two members, Megan Greene and Huw Pill, wanted to increase it to 4%.The base rate affects the interest that is applied to mortgages, loans and saving accounts. It is the main tool use by the Bank of England to try and control the inflation and is reviewed every six weeks.‌The latest update comes after inflation remained unchanged at 2.8% in May - defying expectations that it was set to rise. The majority of analysts had predicted inflation would rise to 3% last month.But this is still higher than the Bank of England target of 2% inflation. Higher interest rates help bring down inflation as people tend to spend less money when the rate of borrowing is higher. When people spend less money, price rises slow down.How does it affect my mortgage?You should not see any immediate change to your mortgage repayments today, as the base rate has not changed. The impact future base rate decisions have on your mortgage depends on the type of deal you are on.‌Tracker mortgages follows the movement of the base rate, so this can go up or down when it is changed. If you have a standard variable rate (SVR) mortgage, then this also generally changes when the base rate is updated, though lenders do not have to pass on the cut or rise in full.If you have a fixed rate mortgage, you have agreed to pay a fixed amount every month for a set period of time. This means your payments are not affected by the base rate and won't change until your fixed deal has ended.‌How does it affect my debt?If your credit card is linked to the base rate, then you should not see any changes today. The average credit card purchase APR is around 36%, according to Moneyfacts.But not all credit cards are explicitly linked to the base rate. Most credit cards have a variable rate, which means they can fluctuate over time, at the discretion of your lender.Interest rates on personal loans and car financing are normally fixed. This means if you're in the middle of an agreement, this should not change even when the base rate is updated, as you have already agreed set repayments.‌However, a change in the base rate can impact the rates that are applied to new agreements.How does it affect my savings?When the base rate is higher, banks and building societies generally offer better savings rates - but when it is expected to fall, saving rates normally start coming down.If your savings rate is variable, it can change from time to time. If your money is locked away into a fixed-rate account, then your rate will not change for a set period of time. MoneySavingExpert.com lists the best rates currently available.‌Revolut offers 5% for six months on up to £25,000 for new customers, made up of 2.9% variable plus a six month 2.1% bonus. Cahoot also offers 5% on up to £3,000 for up to a year, but the rate is variable.Chase is also offering 4.5% for new customers, including a 12-month 2.25% bonus. In terms of ISAs, Trading 212 offers 4.51% for newbies, made up of 3.6% variable and a one-year 0.91% bonus.If you are looking to lock your cash away, MBNA pays 4.85% for a one-year fix, or for a longer term, Afin Bank offers 4.9% for a five-year fix.Article continues belowRegular savings accounts offer the best rates, but these come with strict terms and conditions. You can normally only make small deposits each month and some accounts restrict how many withdrawals you can make.Zopa pays 7.1% variable for six months but you can only deposit up to £300 each month.