Bank Rate in United Kingdom
The Bank of England's policy rate over the last decade was initially maintained at historically low levels to support post-financial crisis recovery. Rates saw a gradual increase pre-pandemic but were slashed to near-zero in 2020 to mitigate the economic impact of COVID-19. As the UK economy started recovering in 2021-2022, and inflationary pressures mounted, the Bank began increasing rates to control rising inflation. Then, from 2024, the Bank of England started to cut rates again as the battle against inflation was considered to have been largely won.
The bank rate ended 2024 at 4.75%, compared to the end-2023 value of 5.25% and the figure a decade earlier of 0.50%. It averaged 1.55% over the last decade. For more interest rate information, visit our dedicated page.
United Kingdom Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for United Kingdom from 2014 to 2024.
Source: Macrobond.
United Kingdom Interest Rate Data
2020 | 2021 | 2022 | 2023 | 2024 | |
---|---|---|---|---|---|
Bank Rate (%, eop) | 0.10 | 0.25 | 3.50 | 5.25 | 4.75 |
SONIA Rate (%, eop) | 0.04 | 0.19 | 3.43 | 5.19 | 4.70 |
10-Year Gilt Yield (%, eop) | 0.19 | 1.02 | 3.66 | 3.60 | 4.55 |
Central Bank leaves rates unchanged in September
Latest bank decision: On 18 September, the Central Bank voted to keep the Bank Rate at 4.00%, following total cuts of 125 basis points since mid-2024.
Upside risks to prices drive hold: The Bank’s decision was underpinned by a desire to assess the impact of previous monetary easing before embarking on further rate cuts, in a context of currently elevated pay growth and headline inflation that is nearly double the 2.0% target.
More cuts likely to come: The Central Bank hinted it could cut rates further going forward, which is also the prevailing opinion among our panelists. Most panelists see 25 basis points of further cuts by end-2025, with a couple seeing room for a 50 basis-point cut and several forecasting no more cuts at all. Risks appear skewed towards no more cuts in 2025 due to persistent price pressures.
Panelist insight: On the outlook, ING analysts said: “Services inflation should move lower from spring 2026, partly on account of much lower rental growth. Wage growth should fall much closer to 3.5% by year-end, judging by recent pay surveys. And importantly, the late-November budget is likely to raise taxes more significantly than it lifts spending, adding an extra headwind for 2026. […] We’re still narrowly favouring one more cut this year, though that’s a low conviction view. November looks fairly 50:50 to us right now and the data will decide one way or the other.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects British interest rate projections for the next ten years from a panel of 39 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for British interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our British interest rate projections.
Want to get access to the full dataset of British interest rate forecasts? Send an email to info@focus-economics.com.
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