Central Bank cuts again: At its meeting on 11 December, the Central Bank of the Republic of Turkey (TCMB) reduced...
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
| 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) | 0.19 | 1.02 | 3.66 | 3.60 | 4.55 |
Central Bank leaves rates unchanged in November
Latest bank decision: In early November, the Central Bank voted to keep the bank rate at 4.00%, following total cuts of 125 basis points from August 2024 to August 2025. A minority of members on the Bank’s committee voted to lower rates.
Bank remains in wait and see mode: The Bank’s decision was underpinned by a desire to assess the impact of previous monetary easing before embarking on further rate cuts, and a wish to ensure that disinflation continues—especially in a context of headline inflation that is nearly double the 2.0% target.
More cuts likely to come: The Central Bank hinted it could cut rates further going forward, which is also the prevailing opinion among our panelists: Virtually all panelists see multiple rate cuts between now and the end of next year.
Panelist insight: On the outlook, Berenberg’s Andrew Wishart said: “With the BoE no longer exerting much downward pressure on aggregate demand and inflation, other forces will have to curb them. Fortunately, slowing real income growth and the UK’s imminent fiscal consolidation should meet the task. Together, we expect these forces to turn services price growth onto a downward path in early 2026. That will provide the green light for the next rate cut, but probably not in time for the BoE’s December meeting. If the Chancellor announces a more aggressive and front-loaded fiscal consolidation in the Budget on 26 November, we would likely revise down our forecast for the terminal bank rate from our current forecast of 3.5%.”
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 38 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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