The Bank of England kept the key Bank Rate unchanged at a 16-year high of 5.25% for the fourth consecutive time during its first meeting of 2024, in line with market expectations. However, two policymakers preferred to increase it by 25bps while one member preferred to reduce it by 25bps. The central bank said monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term, but dropped a reference to further tightening and acknowledged that the risks to inflation are more balanced. Still, key indicators of inflation persistence remain elevated although services inflation and wage growth have fallen by somewhat more than expected. Policymakers expect GDP growth to pick up gradually during the forecast period, in large part reflecting a waning drag on the rate of growth from past increases in Bank Rate. CPI inflation is projected to fall temporarily to the 2% target in Q2 2024 before increasing again in Q3 and Q4. source: Bank of England
The benchmark interest rate in the United Kingdom was last recorded at 5.25 percent. Interest Rate in the United Kingdom averaged 7.09 percent from 1971 until 2024, reaching an all time high of 17.00 percent in November of 1979 and a record low of 0.10 percent in March of 2020. This page provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. United Kingdom Interest Rate - data, historical chart, forecasts and calendar of releases - was last updated on February of 2024.
The benchmark interest rate in the United Kingdom was last recorded at 5.25 percent. Interest Rate in the United Kingdom is expected to be 5.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the United Kingdom Interest Rate is projected to trend around 3.50 percent in 2025 and 2.50 percent in 2026, according to our econometric models.
United Kingdom Interest Rate
In the United Kingdom, benchmark interest rate is set by the Monetary Policy Committee (MPC). The Bank of England official interest rate is the repo rate. This repo rate applies to open market operations of the Bank of England with a group of counterparties (banks, building societies, securities firms).
| Actual | Previous | Highest | Lowest | Dates | Unit | Frequency | ||
|---|---|---|---|---|---|---|---|---|
| 5.25 | 5.25 | 17.00 | 0.10 | 1971 - 2024 | percent | Daily |
News Stream
BoE Leaves Rates Unchanged, Drops Tightening Guidance
The Bank of England kept the key Bank Rate unchanged at a 16-year high of 5.25% for the fourth consecutive time during its first meeting of 2024, in line with market expectations. However, two policymakers preferred to increase it by 25bps while one member preferred to reduce it by 25bps. The central bank said monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term, but dropped a reference to further tightening and acknowledged that the risks to inflation are more balanced. Still, key indicators of inflation persistence remain elevated although services inflation and wage growth have fallen by somewhat more than expected. Policymakers expect GDP growth to pick up gradually during the forecast period, in large part reflecting a waning drag on the rate of growth from past increases in Bank Rate. CPI inflation is projected to fall temporarily to the 2% target in Q2 2024 before increasing again in Q3 and Q4.
2024-02-01
BoE Expected to Leave Rates Steady for 4th Time
The Bank of England is expected to keep the key base rate unchanged at a 16-year high of 5.25% for the fourth consecutive time during its first meeting of 2024. However, investors are keen to see the vote-split and the number of policymakers advocating for a rate hike or cut. Traders anticipate the central bank to drop references to more tightening, with a focus on any hints regarding the timing of rate reductions, although most policymakers have cautioned that it is too early to talk about lowering borrowing costs. The central bank will also release its quarterly economic outlook with new inflation forecasts. Inflation rate in the UK unexpectedly rose to 4% in December from a nearly two-year low of 3.9% in November. However, data published this week by the British Retail Consortium showed prices in British shops rose at the slowest annual pace since May 2022 in January. Meanwhile, wage growth continues to slow, but the economic performance has been very sluggish in recent months.
2024-02-01
BoE Says Rates to Stay Higher for Longer
The Bank of England voted by a majority of 6-3 to uphold its benchmark interest rate at a 15-year high of 5.25% for the third consecutive time during its December meeting, aligning with policymakers' efforts to combat inflation, even in the face of indications pointing to a deteriorating economic landscape. The remaining three members advocated for a 25 bps rate hike, citing the relatively tight labor market and evidence of persistent inflationary pressures. The central bank has emphasized the probable necessity for an extended period of restrictive monetary policy to curb inflation, while also highlighting the potential requirement for further tightening should persistent inflationary pressures persist. Despite these statements, investor forecasts anticipate a decline in UK interest rates next year. However, they have adjusted their bets on the extent of rate cuts, with the first fully priced in for June instead of May before the decision.
2023-12-14
