A unanimous vote: On 6 February, the monetary policy committee of the Reserve Bank of India (RBI) voted unanimously to...
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 holds rates in February
Bank resumes rate cuts after brief pause: In early February, the Central Bank voted to keep the bank rate at 3.75%, following cuts of 150 basis points from August 2024 to December 2025. Four of nine committee members voted to reduce rates further.
Bank takes cautious approach: The Bank likely decided to take a wait-and-see approach to evaluate the impact of past monetary easing before embarking on further cuts, particularly in a context of inflation still persistently above the 2.0% target.
More easing to come: The Central Bank said that the bank rate was “likely to be reduced further”. This matches the prevailing opinion among our panelists: Virtually all panelists see at least one more rate cut between now and the end of 2026.
Panelist insight: On the outlook, ING analysts said: “The [February] decision unquestionably boosts the chances of a March rate cut, which is a bit of a surprise. Not much has changed in the economic data since the December meeting, where the Bank cut rates but signalled it could slow the pace of easing. Instead, it seems those voting for another cut this month were swayed not by the data but by new analysis contained in the accompanying Monetary Policy Report. That analysis states that the rate of wage growth, which is consistent with the 2% inflation target, is around 3.25%. That's barely below current rates of private sector pay growth of 3.6%, which we expect to drop to 3% within months.”
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 39 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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