Latest bank decision: At its meeting on 26 March, the Central Bank decided to cut 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 March
Latest decision: In mid-March, 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 in light of high global energy prices: The Bank decided to take a wait-and-see approach to evaluate the impact of past monetary easing, in a context of inflation above the 2.0% target and upside risks to inflation stemming from the recent surge in energy prices linked to the Iran war.
Guidance turns open-ended: The Central Bank said it “stands ready to act as necessary” to meet the target, replacing the previous meeting’s guidance that the bank rate was “likely to be reduced further”. While our Consensus is currently for monetary easing later this year, panelists are likely to revise their interest rate forecasts upwards in coming weeks.
Panelist insight: Goldman Sachs analysts said: “Our baseline forecasts assume a gradual resumption of flows through the Strait of Hormuz and we consequently expect the MPC to remain on hold at the upcoming meetings. But a near-term hike is now a significant risk if the energy shock continues to build. We now think that the Committee will remain on hold for longer and maintain Bank Rate at 3.75% throughout 2026 (versus quarterly cuts from July previously).” ING’s James Smith said: “The Bank of England's unquestionably hawkish decision to hold rates has opened the door to future hikes if energy prices stay elevated. Yet we'd be careful in drawing clear signals from today's move, which also floated the possibility of faster rate cuts. Under ING's base case energy scenario, we think the most likely path forward is a prolonged pause.”
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 42 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
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