The Monetary Policy Committee meets on Thursday 18 June, and the base rate has now sat at 3.75% since December — long enough that investors have stopped pricing imminent cuts and started reading the Bank's language for signs of the opposite. At the April meeting the vote split 8-1 to hold, with one member pushing for a rise to 4%, and the accompanying report warned that inflation is heading back towards 3.3% by the autumn. For a Stocks and Shares ISA investor, the number the Committee announces matters far less than the sentence that follows it. A held rate with a hawkish tone is a very different signal from a held rate with a dovish one, and your portfolio should be ready for both.
The instinct after a long pause is to do nothing, and for a well-built portfolio that instinct is usually correct. But "do nothing" should be a decision you arrive at after checking your positioning, not a default you fall into because checking feels like effort. The June meeting is a natural prompt to look at three things: how much duration you are holding in bonds, whether your cash is actually working, and whether your UK equity exposure is the right size for a domestic economy the Bank thinks is running warmer than it would like.
Gilts: the boring trade that suddenly has an edge
Short-dated gilts have quietly become one of the more sensible holdings inside an ISA, and the reason is tax. A gilt held to maturity pays no capital gains tax on the price gain, and with several low-coupon issues trading below par, a chunk of your return arrives as a tax-free capital gain rather than taxable income. For a higher-rate taxpayer, a two-year gilt yielding around 4% gross can beat a 4.5% savings account once tax is accounted for. If the Bank signals on 18 June that rates are staying higher for longer, short gilts hold up well; if it hints at cuts further out, the slightly longer end starts to look interesting. Buy them direct rather than through a fund and you keep the tax treatment clean.
Cash inside the ISA is not a parking space — it is a position
Plenty of investors hold 10% or 15% of their ISA in cash and forget it is there, earning whatever default rate the platform deigns to pay. Some platforms pay 4% or more on uninvested cash; others pay almost nothing and pocket the difference. Check yours. If you are sitting on a meaningful cash buffer waiting to deploy after the June meeting, make sure it is at least earning its keep while it waits. Idle cash earning 0.5% inside a tax wrapper is the most expensive caution money can buy.
The home bias question, in reverse
British investors are routinely told they hold too much UK equity. The honest counter-point is that with the Bank keeping rates firm to fight domestic inflation, the FTSE's heavy weighting towards banks, energy and miners is not the liability it was during the cheap-money decade. Higher-for-longer rates flatter bank margins, and a FTSE 100 yielding around 3.6% pays you to wait. This is not a reason to pile in — your "global" tracker is still 65% American and that concentration is the bigger risk. It is a reason to stop apologising for the UK sleeve you already own.
What to actually do before Thursday
Rebalance if any holding has drifted more than five percentage points from its target — that is the discipline that quietly does most of the work, selling what ran and buying what lagged. Make sure your full £20,000 ISA allowance for 2026/27 is being used or earmarked; the allowance does not roll over, and a windfall left in a taxable account through indecision over a single rate meeting is a small unforced error. Then leave it alone. The investors who do worst around central bank meetings are the ones who trade the announcement; the ones who do best set their positioning the week before and watch the noise from the sidelines.