Market Update March 2026

The Bank of England has held Bank Rate at 3.75%, maintaining a cautious stance amid ongoing uncertainty. While there has been no change to the base rate, the broader message remains that inflation risks particularly those linked to energy prices and geopolitical developments have not fully subsided.

For mortgage pricing, this distinction is key. Fixed rates are driven more by swap rates than by the Bank Rate itself, and recent increases in swap rates have already led lenders to reprice products upwards. As a result, mortgage rates have continued to edge higher despite the base rate remaining unchanged.

Although inflation eased earlier in the year, expectations have shifted, with the potential for upward pressure to return if energy costs remain elevated. This has reduced confidence around the timing of any future rate cuts and contributed to a more reactive pricing environment.

Lender appetite remains strong, but product pricing is moving more frequently, and availability can change at short notice.

Key takeaway:

The market is being driven by expectations rather than current rates, making timing and speed of application increasingly important.