Rate Cut Hint Sparks Hope, But Mortgage Relief Still Distant

Bank of England Holds Interest Rates Steady, Hints at Future Cuts

London – The Bank of England (BoE) held UK interest rates steady at 3.75% on Thursday, February 5, 2026, but signaled that future cuts were likely, according to the BBC. The decision was reached by a narrow margin, with the decision-making committee split five to four.

Economists had not anticipated a rate cut after borrowing rates were reduced in December, given the mixed economic backdrop. Governor Andrew Bailey told the BBC that there was likely to be "some further reduction" in rates later this year. The Bank also lowered its prediction for economic growth this year and raised its forecast for unemployment, expectations which make further rate cuts more likely.

Bailey cautioned that rates were not expected to fall back to the lows seen at the start of the pandemic, which were the "product of exception." Dharshini David, Deputy Economics Editor at the BBC, noted that while the BoE hinted at rate cuts, borrowers should not expect Covid-era mortgage deals to return.

Meanwhile, in the United States, Treasury Secretary Scott Bessent faced questions from the Senate Financial Stability Oversight Council regarding President Donald Trump's ongoing campaign to slash interest rates, despite concerns that such a move could turbo-charge inflation, Al Jazeera reported. Bessent declined to rule out future lawsuits against the Federal Reserve.

The current interest rate environment has implications for savers as well. According to CBS News, a $40,000 money market account can earn sizable amounts of interest in just a few months. However, traditional savings accounts, with interest rates under 0.40%, are considered a poor choice in today's competitive interest rate climate.

Euronews reported that the Bank of England's decision was among the top news stories of the day, as Europe and the world grappled with various economic and political developments.