Latest bank decision: At its meeting on 12 August, the Central Bank decided to cut the cash rate by 25...
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) | 0.20 | 0.97 | 3.67 | 3.54 | 4.57 |
Central Bank leaves rates unchanged in June
Latest bank decision: On 19 June, the Central Bank voted to leave the Bank Rate at 4.25%.
Monetary policy drivers: The Bank likely decided to pause its easing cycle—which has seen rates cut by 100 basis points since mid-2024—due to inflation above the Central Bank’s 2.0% target and the desire to assess elevated uncertainty in the global economy and geopolitics.
More cuts to come: The Central Bank reiterated that future rate cuts would be “gradual and careful”. Our Consensus is currently for around 50 basis points of extra cuts between now and end-2025, with forecasts ranging from zero to 100 basis points.
Panelist insight: On the outlook, ING analysts said: “Despite weaker jobs numbers, the Bank of England is showing little sign that it’s about to pick up the pace of easing. We expect cuts in August and November. EUR/GBP upside risks are set to persist in the short and medium term.” In contrast, Berenberg’s Andrew Wishart said: “We expect cost-push inflation to force the BoE to keep bank rate at 4.25% until the end of the year. Healthy household finances, increasing real incomes and rising government expenditures will ensure that domestic spending growth remains robust so that companies can pass on the large increase in their costs to customers in the form of higher prices.”
Consensus Forecasts and Projections for the next ten years
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 43 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.
Latest Global Monetary Policy News
-
Australia: Central Bank cuts rates in August -
Mexico: Central Bank decreases rates in August Latest bank decision: At its meeting on 7 August, the Central Bank decided to lower the target for the overnight... -
Colombia: Central Bank unexpectedly leaves rates unchanged in July Bank stands pat: At its meeting on 31 July, the board of directors of the Central Bank of Colombia (Banrep)... -
Dominican Republic: Central Bank leaves rates unchanged in July Rates remain unchanged for the seventh consecutive time: At its meeting on 31 July, the Central Bank of the Dominican... -
South Africa: SARB cuts rates again in July and announces new inflation target Bank cuts rates to over two-year low and unveils new inflation target: At its meeting on 31 July, the Monetary... -
Canada: Bank of Canada keeps rates steady in July Latest bank decision: At its meeting on 30 July, the Bank of Canada kept its target for the overnight rate... -
United States: Central Bank leaves rates unchanged in July Latest bank decision: At its meeting ending on 30 July, the Central Bank decided to maintain the target range for...