# Where next for UK interest rates?

By Maike Currie — 2026-02-03

Maike Currie, vice president of personal finance at PensionBee, said: “It’s a big week for central banks, with interest rate decisions from the Bank of England and the European Central Bank, alongside fresh scrutiny of the US Federal Reserve following last week’s nomination announcement of a new Fed Chair.

“Investors will be keeping a close eye on the US central bank, as any rate cuts below three per cent could raise concerns about a potential policy misstep, with risks of having to reverse course quickly if inflation doesn’t get down to target without a growth slowdown.

“The Fed’s next steps will matter to global markets; however, for UK households and their personal finances, the focus this week will be firmly on what the Bank of England decides to do with UK interest rates.

“While interest rates in the UK have started to come down, the path ahead is far from clear.

“Inflation remains sticky, with the cost of food particularly weighing on household finances.

“Rising global agricultural commodity prices, combined with higher domestic labour costs – including the impact of the National Living Wage increase – and heightened global uncertainty, make back-to-back rate cuts unlikely in the near term.

“Policymakers will be proceeding with caution. Further cuts may come later this year, but expect these to be gradual and highly dependent on how inflation, the labour market and growth of the economy evolve.”

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