Latest decision: On 30 July, the Central Bank voted to keep the bank rate at 3.75%, following cuts of 150...
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 July
Latest decision: On 30 July, 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 amid volatile energy prices. A weak labor market and softer-than-expected June inflation likely persuaded the Bank there was no need for an immediate rate hike to curb price pressures.
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. Monetary easing is projected for 2027.
Panelist insight: ING’s James Smith said: “Ultimately, as we’ve argued throughout the crisis, 4% inflation is probably an important line in the sand for the Bank. It argued last summer that when inflation surpasses that level, it is statistically more likely to be consistent with second-round effects and a longer-lasting bout of price pressure. We’re not there yet; we think inflation is set to peak to around 3.5% on the current path of energy prices. The upshot is that unless the situation in the Middle East gets particularly dire, we think the Bank will continue to keep rates on hold through 2026, before cutting rates twice from next spring.”
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 44 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
-
United Kingdom: Central Bank holds rates in July -
United States: Central Bank keeps rates steady in July Decision was not unanimous: At its late July meeting, the Central Bank kept the target range for the federal funds... -
Kazakhstan: National Bank of Kazakhstan cuts base rate in July NBK surprises markets with another cut: At its meeting on 27 July, the National Bank of Kazakhstan (NBK) continued its... -
Russia: Bank of Russia cuts key rate in July CBR makes another cut, surprising markets: At its meeting on 24 July, the Bank of Russia (CBR) made its 10th... -
Kazakhstan: National Bank of Kazakhstan cuts base rate in July NBK surprises markets with another cut: At its meeting on 24 July, the National Bank of Kazakhstan (NBK) continued its... -
Turkey: Central Bank leaves rates unchanged in July TCMB stands pat for fourth meeting in a row: At its meeting on 23 July, the Central Bank of the... -
Hungary: Magyar Nemzeti Bank cuts rates in July Policy rate cut to an over four-year low: At its meeting on 21 July, the Monetary Council of the Magyar...