Interest Rate in United Kingdom
United Kingdom - Interest Rate
BoE hikes by 50 basis points in December
On 15 December, the Bank of England (BoE) increased the bank rate from 3.00% to 3.50%, marking the ninth successive rate hike.
The Bank’s decision to tighten its stance was driven by the desire to tame inflation, which is currently in double digits and more than five times the Bank of England’s 2.0% target. The tight labor market and recent acceleration in private-sector pay growth also underpinned the Bank’s decision.
The Bank reiterated its previous guidance that “further increases in Bank Rate may be required for a sustainable return of inflation to target”. The Consensus is for the Bank Rate to peak at slightly over 4% in mid-2023, with forecasts for the peak level ranging from 3.75% to 4.50%.
Analysts at Goldman Sachs are at the hawkish end of our panel:
“Looking ahead, we continue to expect another 50bp hike in February, followed by 25bp hikes in March and May for a terminal rate of 4.5%.”
ING’s James Smith is more dovish:
“For now, our best guess is the Committee implements another 50bp hike in February before calling it a day. The hawks can continue to point to 6% wage growth and the fact that core services inflation is running higher than expected in November. But today’s meeting is a further demonstration of the delicate balancing act facing the BoE, between mitigating the risks of a tight jobs market on the one hand against mounting concerns about the housing market and the health of corporate borrowers on the other. We expect Bank Rate to peak at 4% in the new year.”
United Kingdom - Interest Rate Data
|Policy Interest Rate (%)||0.50||0.25||0.50||0.75||0.75|
5 years of economic forecasts for more than 30 economic indicators.
United Kingdom Interest Rate Chart
Source: Bank of England (BoE).
United Kingdom Facts
|Bond Yield||0.83||-3.04 %||Jan 01|
|Exchange Rate||1.33||-0.35 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
January 24, 2023
The S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) came in at 47.8 in January, down from December's 49.0.
January 23, 2023
Consumer confidence fell to minus 45.0 in January from December's minus 42.0.
January 18, 2023
Inflation dropped to 10.5% in December from November’s 10.7%.
January 17, 2023
According to the ONS, in September–November the unemployment rate registered 3.7%, while the redundancy rate was below pre-pandemic levels.
January 13, 2023
GDP rose 0.1% month-on-month in seasonally-adjusted terms in November (October: +0.5% mom).