UK interest rates: is a surprise cut on the cards?

Creditspring: ‘Costs aren’t going to go down overnight’ whatever the MPC decide tomorrow

It can be easy to over-emphasise the importance of the MPC’s regular meeting to dictate interest rates for regular households.

The decision – whether interest rates are hiked, held, or cut – are certainly important for much of the economy, but ordinary Brits often will not feel much of a difference either way, says Tamsin Powell at Creditspring.

“Whether the Bank of England will hold or reduce rates on Thursday, the message to households remains clear that every day costs aren’t going to go down overnight. Inflation remains stuck at 3.8%, and with further tax rises now expected as part of the Autumn Budget, many families and households will be facing a double squeeze on living costs.”

Powell added that while a reduction in interest rates could provide “short-term” relief on borrowing costs and monthly payments, “with so many households already stretched, it won’t address the ongoing pressures from rising bills, stagnant wage growth, and the arrival of the seasonal spending peak as winter and the festive season approaches.”

“Now more than ever, households need to take stock of their finances and plan ahead. Being realistic about spending and setting aside even small savings can help people stay in control as costs rise.”

The MPC won’t take any big decision before the Budget

There’s a case to be made for an interest rate cut in November – but I don’t think they’ll do it.

We all expected inflation to come in higher in September, but if the latest reading is the peak as the Bank of England expects, then inflation will hopefully fall from here. And the economic picture is weakening, so the MPC will want to support growth however it can.

But for me, it’s just too close to the Budget. Who knows what Rachel Reeves will spring on us later this month? There’s so much unpredictability that I think the MPC will wait and see, and if there is to be another interest rate cut this year it will be at the December meeting.

The irony of this is of course that, if Reeves had scheduled her “Autumn” Budget slightly earlier in the year, then maybe the Bank would have been able to support her growth ambitions by cutting rates sooner…

Where have interest rates gone in the last 12 months?

Interest rates have been on a downward trajectory since August 2024, when the MPC voted to cut the base rate for the first time since March 2020.

Since then, the bank rate has been cut five times, going from 5.25% in August 2024 to 4% today.

In this most recent set of interest rate cuts, the MPC has maintained a “gradual and careful” approach. Cuts have more or less followed a quarterly rhythm so far, but this trend is not necessarily going to continue if the MPC decides that the economic circumstances do not warrant a rate cut.

BoE governor Andrew Bailey regularly notes that monetary policy is not on a set path.

When does the Bank of England announce UK interest rates?

The Bank of England’s next interest rate decision will be announced tomorrow (6 November) at midday.

This is the penultimate base rate meeting of 2025, with the final meeting of the year coming just in time for Christmas on 18 December.

This week’s meeting will also include the quarterly Monetary Policy report, which will provide a detailed update to the Bank of England’s outlook and forecasts for inflation and other economic considerations.

The MPC meets roughly every six weeks. See our explainer on upcoming MPC meeting dates for the upcoming interest rate decision schedules.

Good afternoon, and welcome to our live coverage of the upcoming interest rates decision.

The Bank of England’s Monetary Policy Committee (MPC) announces its latest decision tomorrow (6 November), and most experts expect it to hold interest rates at 4%.

The MPC, led by Bank of England governor Andrew Bailey, faces a tricky balancing act. On the one hand, the economy is weakening: UK wage growth is slowing, while unemployment climbs.

Inflation was expected to peak at 4% in September before falling through 2026, but the consumer prices index (CPI) reading came in at 3.8% for the month, unchanged since July, perhaps indicating that the current inflationary wave is less severe than had been expected.

But it is still nearly double the Bank’s target rate of 2%, and as such most experts think the MPC will stick with a cautious hold tomorrow.

Follow us here for rolling insight as well as live reporting of the MPC’s decision.