BoE Holds at 4.25% – A Key Moment for Contractors to Review Mortgage Options

Contractors, first-time buyers, and self-employed professionals — interest rate momentum may be turning. The Bank of England has voted to hold the base rate at 4.25%, but a potential rate cut as soon as August is now firmly on the table.

In a decision closely watched by markets, the Bank of England’s Monetary Policy Committee (MPC) voted 6–3 to maintain the base rate at 4.25% in June 2025. Three members voted for a cut to 4.0%, citing signs of softening in the UK labour market and slowing wage growth. Inflation currently stands at 3.4%, still well above the 2% target, but downward pressures are building. Governor Andrew Bailey confirmed: “Interest rates remain on a gradual downward path… we are watching closely how labour market weakness feeds through to inflation.” This comes after a sharp contraction in UK economic output in April and concern over rising energy prices linked to tensions in the Middle East.

Kevin Peachey Cost of Living correspondent, reports that lenders may start cutting fixed-rate mortgages ahead of a formal rate cut, noting: “Lenders tend to price their products based on expectations. Hints of cuts can lead to lower mortgage deals.” The CBI also weighed in, calling this rate hold a “pit stop on the way down” and forecasting three more cuts by early 2026, potentially bringing the base rate to 3.5%. For contractors and borrowers with non-traditional income, this environment could present a rare opportunity — especially before lenders fully adjust pricing.