The Bank of England is expected to maintain current interest rates in a disappointing outcome for many borrowers. Analysts anticipate that the nine-member Monetary Policy Committee will decide to keep the base rate steady at 3.75% due to a recent uptick in inflation. The committee is scheduled to announce its verdict at noon on Thursday, with particular attention on the meeting minutes for any indications of potential future rate cuts.
Inflation has climbed back up to 3.4%, marking the first increase since July 2025. The Bank forecasts inflation to approach 2% by the middle of the following year. While a rate freeze this month may be disheartening for mortgage holders, it will offer relief to savers who have experienced declines in deposit returns.
Victoria Scholar, head of investment at Interactive Investor, highlighted the importance of Thursday’s announcement for investors, focusing on potential hints regarding a 25-basis point cut by the Bank of England in March. The decision on a rate cut in either March or April will largely hinge on the latest inflation and employment data.
In other financial news, data from ATM network operator Link revealed that the average person made 15 trips to ATMs last year, withdrawing an average of £1,352, a 5% decrease from the previous year. Overall cash withdrawals by individuals over 16 years old totaled 832 million in 2025, showing a 9% decline from 2024. ATMs remain the primary mode of cash withdrawals in the UK, surpassing cashback and counter transactions at various banking outlets.
Additionally, two fortunate Premium Bond holders from Liverpool and Bedfordshire each won a £1 million prize, according to National Savings & Investments. The winning Bond numbers were disclosed, along with details about the bond holders and their purchase history.
The housing market also saw a slight recovery, with average house prices increasing by 0.3% following a decline in December. Nationwide Building Society reported a 1% annual price growth in January, bringing the average house price to £270,873. The chief economist at Nationwide expressed optimism for housing market activity in the upcoming quarters.
Meanwhile, gold and silver prices experienced a significant drop from record highs after US President Donald Trump nominated Kevin Warsh as the next Federal Reserve chairman. This nomination led to a sell-off, with gold and silver prices plummeting, driven by a boost in the US dollar and reduced demand for safe-haven assets amidst improved investor sentiment.
The precious metals had been on a remarkable rally due to global uncertainties and geopolitical tensions, but the market sentiment shifted following the nomination announcement. Gold and silver prices faced substantial declines, marking a stark contrast to their recent upward trajectory.
