This week's increases in mortgage rates from major lenders could potentially be reversed following a closely contested decision by the Bank of England. The Monetary Policy Committee's latest vote has sparked optimism among financial experts that borrowing costs may soon begin to ease.
A Razor-Thin Majority Decision
At its meeting concluding on 4th February 2026, the Bank of England's Monetary Policy Committee voted by a narrow majority of 5-4 to maintain the Bank Rate at 3.75%. Significantly, four members voted to reduce the rate by 0.25 percentage points to 3.5%, indicating substantial support for monetary easing within the committee.
The Bank stated that while inflation currently remains above the 2% target, it is projected to fall back to around target levels from April. This anticipated decline is attributed to developments in energy prices, including measures implemented in Budget 2025.
Implications for Future Rate Cuts
Crucially, the Bank of England indicated that based on current evidence, the Bank Rate is likely to be reduced further. However, they cautioned that the extent and timing of any additional monetary policy easing would depend on how the inflation outlook evolves in coming months.
Brokers and property market specialists responded positively to the announcement and accompanying minutes, suggesting the Bank's dovish tone and the close vote split could signal the beginning of a downward trend in mortgage rates.
Expert Analysis and Predictions
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, told financial news service Newspage that this development could prompt lenders to reconsider recent rate increases. "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," she explained.
"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."
The End of Rate Hikes?
Tony Redondo, Founder at Cosmos Currency Exchange, offered an even more definitive assessment: "The era of hikes is over, the era of timing the next cut has begun." He added that "the dovish hold signals the Bank of England is on the brink of a pivot."
Redondo elaborated further: "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."
What This Means for Borrowers
The Bank of England's decision and accompanying commentary suggest several important developments:
- The period of consistent interest rate increases appears to be concluding
- Mortgage rates that rose earlier this week could potentially be reduced
- Spring 2026 is emerging as a likely timeframe for the next rate cut
- Future monetary policy decisions will be closely tied to inflation data
For homeowners and prospective buyers, this signals a potential easing of borrowing costs in the coming months, though the exact timing remains dependent on economic indicators, particularly inflation figures due in April.
