# Bank of England poised to hold interest rates steady despite inflation rise

By Sarah Coles — 2026-04-29

Sarah Coles, head of personal finance at AJ Bell, said: “The fact that rates are likely to be staying put this week doesn’t mean we’re set for a period of calm in the savings and mortgage markets.

“Everything from international turmoil to political drama and market competition means both markets could go anywhere from here.

“A big factor in pricing fixed rate savings and mortgages is government bond yields.

“These power the swap rates that banks use to buy fixed rates in the market. And they’ve had a torrid few weeks.

“In March, the outbreak of the Iran war raised inflation fears. The market expected the Bank of England to hike rates a number of times, to keep a lid on price rises.

“This made government bonds look less attractive, so prices fell and yields rose, pushing up fixed rate deals.

“The mortgage market tends to move faster than the savings market, so rates were quicker to respond, but fixed rate savings deals also nudged up.

“During the first half of April, inflation fears eased slightly, so the market started expecting fewer rate rises. It’s why we’ve seen mortgage rates fall a little and savings rates stabilise.

“However, the drama has continued more recently, because political speculation put investors off government gilts and yields rose again. It means we could see rates rise once more.

“The savings market is also being driven by competition. The fact this is the last year of a £20,000 Cash ISA allowance for under-65s means banks have upped their ISA game for the start of the tax year.

“This has had a knock-on effect on the savings market more generally, so there are an enormous number of accounts on offer right now, and rates are competitive.

“It’s a big part of the reason why we have seen easy access rates rise. If competition remains fierce, it could help hold rates up.

“However, an awful lot will hang on what the market thinks will happen next.

“If the Bank of England hints that it might raise rates to combat inflation, it would hike gilt yields, and push savings and mortgage rates up.

“Similarly, escalation in the war could stir more fears of inflation, which again would increase rate expectations. Meanwhile rising political debate – particularly around the local elections – could also mean gilt yields rise.

“On the flip side, if any of these things don’t materialise, yields could fall back and savings and mortgages fall with them.

“In such an uncertain environment, it’s impossible to guess what comes next.

“It means anyone planning to fix their savings might want to do so now, while rates are so strong, rather than holding out for more rises.

“Meanwhile, those with a remortgage due in the next six months might want to agree a deal for their remortgage now.

“If rates fall from here, they can shop around elsewhere closer to the time, whereas if they rise, they’ve protected themselves from bigger hikes in their monthly payments.”

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