Latest bank decision: At its meeting on 26 June, the Central Bank decided to lower the target for the overnight...
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 150 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 41 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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