Latest bank decision: At its meeting on 25 June, the Central Bank decided to hold 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 2025.
Source: Macrobond.
United Kingdom Interest Rate Data
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Bank Rate (%, eop) | 0.25 | 3.50 | 5.25 | 4.75 | 3.75 |
| SONIA Rate (%, eop) | 0.19 | 3.43 | 5.19 | 4.70 | 3.73 |
| 10-Year Gilt Yield (%, eop) | 1.02 | 3.66 | 3.60 | 4.55 | 4.47 |
Central Bank holds rates in June
Latest decision: On 18 June, the Central Bank voted to keep the bank rate at 3.75%, following cuts of 150 basis points from August 2024 to December 2025.
Bank takes cautious approach: The Bank decided to take a wait-and-see approach to evaluate the impact of past monetary easing and the impact of the past rise in energy prices on inflation and GDP growth. A weakening labor market and soft underlying economic activity meant there was no need for an immediate rate hike to curb inflation that is currently running above the 2% target.
Rates likely to remain stable this year: The Central Bank said it “stands ready to act as necessary” to meet the target. Panelists have revised up their end-2026 bank rate forecasts considerably since end-February, with the Consensus for the rate to close the year around its current level. However, some panelists see rate cuts and some see hikes.
Panelist insight: On the outlook, Nomura analysts said: “This does not feel like a Committee ‘on the edge’ – ready to pull the trigger on tighter policy at the slightest piece of stronger data. Rather, notwithstanding the geopolitical uncertainties the economy faces, this set of minutes gave the impression that the majority of the MPC was comfortable with rates at their current level. As such, we remove our single 25bp rate hike from our profile but retain our two 25bp cuts in H2 2027, which would take policy back to a neutral setting by the end of our forecast horizon.” ING’s James Smith concurred: “There's nothing in [the] decision that changes our mind that the next move is likely to be a rate cut in 2027. It feels like it would take a lot for the five more neutral-to-dovish members of the nine-strong committee to vote for a hike, barring the Iran deal falling apart and energy prices moving materially higher.”
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 45 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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