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The Bank of England’s (BoE) next meeting to determine interest rates is tomorrow (18 December), and all eyes will be on the Monetary Policy Committee (MPC) and whether its members opt to continue lowering rates.

The base rate – currently at 4 per cent after being cut three times this year – impacts business, consumers and taxpayers through everything from mortgages to loans and savings, so what do experts foresee, both this week and beyond?

Will interest rates be cut?

After a hugely divisive vote in November, where analysts were split on their expected outcomes and the eventual MPC vote was 5-4 in favour of a hold, this time it’s a very different story.

Almost everybody expects a cut to interest rates, as the cautious approach from the BoE meant they gave themselves until after Rachel Reeves’s Budget to decide the next move.

Now that the Budget fallout has been absorbed and further data from November has come through, everything points to a base rate cut down to 3.75 per cent.

Perhaps most importantly, this week’s inflation data coming in lower than expected at 3.2 per cent means the BoE can have confidence that a rate cut is well-timed and necessary.

Emma Wall, chief investment strategist at Hargreaves Lansdown, says “a rate cut tomorrow is all but guaranteed, though markets should not expect the voting to be unanimous”, while AJ Bell’s head of financial analysis Danni Hewson added “there are signs that we’ve scaled the sneaky second peak” of inflation – which also points to a rate cut.

Barclays analyst Jack Meaning wrote in a research note that a cut was also expected, “albeit with a cautious tone”.

In other words, most analysts and economists are expecting another split vote with some of the MPC’s more cautious members wanting to stay put while inflation is still well above 2 per cent target, but overall a cut will win the day.

But interest rate decisions take into account multiple factors over long periods of time, as well as expectations about what lies ahead – and this year has been tricky in both regards.

As well as the domestic situation of higher-for-longer inflation, we’ve had more uncertainty in 2025 as a result of Donald Trump’s tariffs, businesses dealing with higher labour costs coming into force, and escalated geopolitical tensions after Israel’s strike on Iran led to a brief oil-price scare.

It’s worth remembering that with mortgages in particular, many products are priced using future expectations of the interest rate (swap rates), so changes in that market can already be accounted for.

For savers, though, whether or not an immediate cut to variable rates is coming, it’s always worth checking the best offers on the market to make sure your money is earning as much as it can for you.