UK Interest Rates Held at 3.75%: News, August 2026

The last two weeks of July brought a run of official data for UK households, and most of it pointed the same way: the economy is cooling gently rather than stalling. The Bank of England left interest rates alone, shoppers kept spending, and the housing market stayed subdued. Here is what changed between 23 July and 6 August, and what each figure means for your money.

Bank of England held Bank Rate at 3.75% for a fifth meeting

The Bank of England’s Monetary Policy Committee voted by a majority of 6 to 3 to hold Bank Rate at 3.75% at its meeting ending on 29 July 2026, the fifth meeting in a row without a change. The three dissenting members, Megan Greene, Catherine Mann and Huw Pill, wanted a quarter-point rise to 4%, arguing that higher energy prices tied to the conflict in the Middle East could feed into wages and prices. The majority preferred to wait, judging that tighter financial conditions were already doing some of the work. For savers and borrowers the message is that the cutting cycle is on pause, not finished: fixed savings rates near 5% are worth locking in while they last, but there is little reason to rush into a mortgage in the hope of much lower rates soon. If you are weighing cash against investing, our guide to a cash ISA versus a stocks and shares ISA sets out the trade-off. Source: Bank of England, July 2026 Monetary Policy Summary.

Retail sales rose 1.0% in June as warm weather lifted spending

Retail sales volumes rose by 1.0% in June 2026, following a 1.2% rise in May, according to the Office for National Statistics. Clothing store sales jumped 1.9%, their biggest monthly gain since September 2025, which retailers put down to sales promotions and the second warmest June on record. Steady spending shows households have not pulled back sharply despite high borrowing costs, which supports the Bank’s case for holding rates rather than cutting. For your own budget, warm-weather splurges are easy to overlook: the habit that builds wealth is a regular amount set aside first each month, as covered in our guide to how much to invest each month. Source: ONS retail sales, Great Britain, June 2026.

Mortgage approvals climbed to 58,200 as borrowing rebounded

Bank of England figures showed net mortgage approvals for house purchases rose to 58,200 in June, up from 56,600 in May, while net mortgage borrowing jumped to £7.7 billion from £3.3 billion. The average interest rate on newly drawn mortgages edged up to 4.35%, from 4.22% in May, reflecting the recent rise in fixed deals. Consumer credit borrowing held at £1.8 billion, in line with its six-month average, though credit card balances grew 12.5% over the year. More approvals suggest buyers are slowly returning, but the dearer effective rate is a reminder to compare the whole market rather than accept the first offer. Source: Bank of England Money and Credit, June 2026.

House price growth slowed to 1.8% in July

Nationwide reported that annual house price growth slowed to 1.8% in July, down from 2.2% in June, leaving prices roughly flat in real terms once inflation is counted. Nationwide’s chief economist, Robert Gardner, said activity and prices had remained soft, partly reflecting the uncertain economic backdrop. A gently cooling market helps first-time buyers, but with mortgage rates still around 5% the bigger levers are the size of your deposit and the tax wrapper you save into: using this year’s ISA allowance keeps the growth and interest tax-free, as our ISA allowance guide for 2026 explains. Source: Nationwide House Price Index, July 2026.