What Thursday's Rate Meeting Could Mean for Your Savings

For the first time in a while, savers are heading into a Bank of England decision with the wind at their backs. The Monetary Policy Committee announces its verdict at midday on Thursday 18 June, and the question isn't whether rates will fall — it's whether the next move might actually be up.

The base rate currently sits at 3.75%, where it's been since a 0.25% cut in December 2025. That cut now looks like it may have been the bottom of the cycle rather than the start of a downward run.

What economists are expecting

The consensus is clear: a hold. A Reuters poll of 65 economists found every single one expects the base rate to stay at 3.75% on Thursday. Markets agree, with swap rates pricing a hold as the overwhelmingly likely outcome.

But the consensus stops there. There was no agreement among those same economists on what happens afterwards — and that's where it gets interesting for savers.

At the last meeting on 30 April, the MPC held rates in an 8–1 vote, with Chief Economist Huw Pill breaking ranks to vote for a hike to 4%. The Committee signalled it would "lean against" second-round inflation effects, which markets read as a distinctly hawkish shift. Pricing has since moved towards roughly 50 basis points of tightening over the next year, rather than the cuts savers had been bracing for through 2024 and early 2025.

The driver is inflation. UK CPI has risen to 3.3%, pushed higher by energy prices linked to the conflict in the Middle East. The forecast range for where rates land by the end of 2026 is unusually wide — anywhere from 3.5% to 4.25% — which tells you how much uncertainty policymakers are working with.

One date worth circling: the ONS publishes May's inflation figures on Wednesday 17 June, the day before the decision. A hotter-than-expected reading would harden the case for a hold now and a hike later.

What it means for savers

Higher-for-longer rates are good news if you've got cash put away. While the base rate has held, savings competition has actually improved. There are now over 1,826 savings accounts on the market, and more than half pay above the base rate — a level of choice that's close to a record.

The numbers as of mid-June:

• Easy access: the top rates have nudged up to around 5% AER, led by app-based providers like Chip and Revolut.

• One-year fixed bonds: typically 4.5% to 4.85%, with the average one-year bond climbing to 4.19% — its highest since April 2025.

• Cash ISAs: easy-access deals around 4.51% to 4.76%, fixed deals up to roughly 4.73%.

• Regular savers: the headline-grabbers, with some paying up to 7% on small monthly deposits.

If the Bank does hike later in the year, fixed-bond rates would likely climb further — so there's an argument for keeping some powder dry rather than locking everything away long-term right now.

The catch most savers miss

With rates this high, tax is the quiet threat. The Personal Savings Allowance lets basic-rate taxpayers earn £1,000 in interest tax-free, dropping to £500 for higher-rate payers and nothing for additional-rate payers. At today's rates, a higher-rate taxpayer breaches that allowance with roughly £10,000 in a 5% account.

That's where a Cash ISA earns its place. The 2026/27 ISA allowance is £20,000, and interest inside it is tax-free for good. Worth noting: from April 2027, under-65s will be capped at £12,000 a year into Cash ISAs, so this tax year is the last chance to shelter the full £20,000 in cash.

The bottom line

Thursday's decision is almost certainly a non-event on the day. The story for savers is the direction of travel — and right now that points to rates staying high, with a genuine chance of going higher. If you're sitting on cash earning less than 4%, you're leaving money on the table regardless of what the MPC says at midday.