*Please note, this article is not advice. If you would like to receive advice on your savings and investments, please contact a financial advisor.*
Today, Thursday 19 June 2025, the Bank of England’s Monetary Policy Committee announced its decision to hold the base rate at 4.25%, with six out of nine members voting in favour of the decision.
The hold reflects the Bank’s cautious approach to tackling rising inflation, with geopolitical uncertainty – notably conflicts in the Middle East and Ukraine – and the highest levels of UK unemployment since 2021 being key factors in the considered, gradual reduction.1
However, further reductions to the base rate are forecast in 2025.
Market pricing suggests that the Bank of England will cut interest rates at least once more in 2025, with some investors predicting the interest rate could go down to 3.5% by the end of the year.2
Many savers will wonder what this means for their savings, and what they could do next.
A base rate hold at 4.25% should be seen as an opportunity for savers to be proactive with their cash.
Further rate cuts are forecast later in the year, meaning the window to lock in to high interest returns is narrowing.
If you have a sizeable amount of money (more than £10,000) in an easy-access, low interest savings account, now might be the time to consider an Instant Access account to capitalise on higher interest rates while they are still available.
Alternatively, if you are able to lock some of your cash into a fixed-term deposit, you will be able to protect your cash from any potential rate cuts later in the year.
Akoni has examined deposit data from its Individual and Business clients between 7 February and 7 May, a period where there was one base rate cut (6 February) and one base rate hold (20 March), to ascertain savers’ trends.
Perhaps unsurprisingly, when a base rate cut is announced, the percentage of new deposits in fixed-term accounts is high.
Following a cut, 62.2% of all new Akoni Business deposits are placed in fixed-rate accounts, compared to 56% after a hold announcement. Similarly, after a base rate cut, 52.9% of all new Akoni Individuals’ deposits are placed fixed-rate accounts, compared to 51.9% after a base rate hold.
Of greater interest is how a base rate cut or hold announcement shapes the length of fixed-term deposits which Businesses and Individuals choose.
When the Bank of England announced a hold, Businesses overwhelmingly chose six-month deposits (49.48%) over three-month (34%) or one-year products (11.3%).
Individuals, on the other hand, favour one-year deposits (31.4%) over three-month (24.07%) and six-month(22.2%).
A base rate cut announcement dramatically changed these figures for new Business deposits.
Following a cut, 50.8% of new Business fixed-term deposits are in one-year terms, showing a clear preference over six-month (33%) and three-month (12.5%). Individuals’ new fixed-term deposits after a base rate cut have a similar trend: 42.8% in one-year, 25.3% in six-month, 17.4% in three-month.
What’s clear is that after a hold, Businesses favour shorter fixed-rate terms to capitalise on high rates while they are still available, whilst also maintaining liquidity. Individuals, by contrast, view the hold as a chance to lock in to a high rate before the interest rate drops.
Interestingly, a base rate hold has meant more people deposit into Akoni than after a base rate cut.
After the hold announcement on 20March, Akoni saw a 23.07% increase in the number of client deposits in comparison to the previous ‘cut period’. A significant number of these deposits were in instant access accounts.
Between 21 March and 7 May, a ‘hold’ period, 32.9% of all Business deposits and 33.65% of all Individual were in instant access accounts.
By contrast, after the 6 February cut, only 25.2% of all Business deposits and 25.2% of all Individual deposits were placed in instant access accounts.
This suggests savers are keen to take advantage of higher interest rates regardless of product type or length after a hold.
Although it is unclear when the next base rate cut will come, it seems likely that another cut will be announced in 2025.
Why not join other savers inbeing proactive with your money? Call 020 3137 9388 to hear more, or sign up today to see how your cash can earn more for you.
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Six-month Fixed Term
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* Quoted at AER as of 18/06/2025
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