Bank of England Base Rate Tracker
The Bank Rate is set by the Bank of England's Monetary Policy Committee. It influences the interest rates that lenders charge on business loans, mortgages, and other credit products across the UK.
What is the Bank of England Base Rate?
Understanding the UK interest rate and how it affects you
The Bank of England base rate (also known as the BoE base rate, Bank Rate, or UK interest rate) is the core interest rate in the UK. It's the rate the Bank of England charges commercial banks, building societies, and financial institutions when they borrow money, and it's also the rate paid on reserves held with the Bank.
The base interest rate set by the Bank of England influences the interest rates that UK banks charge their customers for borrowing money, including mortgages, business loans, and credit cards. Similarly, it affects the interest rates banks offer on savings accounts.
The Monetary Policy Committee (MPC) is responsible for setting the Bank Rate. This committee meets regularly to decide what interest rate is needed to keep inflation at the government's 2% target over time, while supporting economic growth and employment.
When you borrow money through a mortgage or loan, your bank charges you interest. The interest rate is expressed as a percentage of the total amount borrowed. Changes to the current interest rate UK directly impact how much you pay for borrowing.
Historical Rate Timeline
Explore how the Bank of England base rate has changed over time. Select a time range to view different periods of UK interest rate history.
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How MPC Decisions Are Made
The Monetary Policy Committee (MPC) considers multiple economic indicators when setting the Bank of England base rate. Understanding these factors can help you anticipate potential rate changes.
Inflation Rate
The Bank of England aims to keep inflation at a 2% target. If inflation rises above this level, the MPC is more likely to increase the base rate to cool down the economy.
Economic Growth
Rapid economic growth may prompt rate increases to prevent overheating, while slower growth or recession may lead to rate cuts to stimulate activity.
Unemployment Rate
High unemployment may encourage rate cuts to support job creation, while low unemployment and strong employment growth increase the chance of rate rises.
Consumer Spending
Strong consumer spending can drive inflation higher, potentially leading to rate increases. Weak spending may prompt rate cuts to encourage borrowing and spending.
Housing Market
Rapid house price growth may signal overheating and lead to rate increases. A struggling housing market may influence the MPC to lower rates.
When Does the Base Rate Change?
Understanding MPC meeting schedules and rate announcements
The Monetary Policy Committee meets every six weeks to decide whether the Bank of England base rate should change. However, the base rate does not necessarily change every time they meet.
During times of economic crisis or significant uncertainty, the MPC may meet more frequently. The Bank of England raises and lowers its interest rate to help influence the UK economy.
How Rate Changes Affect You
Changes to the Bank of England base rate can impact various financial products differently.
Bank of England Base Rate History
Throughout UK history since the Bank of England was founded in 1694, certain periods in base rate history stand out as particularly significant.
Highest Ever Rate
November 1979
The Bank Rate reached its peak during a period of high inflation and economic instability, remaining at 17% until July 1980.
Lowest Ever Rate
March 2020
In response to the COVID-19 pandemic, the Bank Rate was cut to a historic low of 0.1% to support the economy during unprecedented uncertainty.
Longest Stability Period
April 1719 - June 1822
The base rate remained remarkably stable at 5% for over 100 years, demonstrating an extended period of economic stability in UK history.
Post-2008 Crisis Stability
March 2009 - August 2016
Following the 2008 financial crisis, the Bank Rate was cut to a historic low of 0.5% in March 2009 and remained unchanged for over seven years, before being lowered again to 0.25% in August 2016.
Predicting Future Rate Changes
What to watch for when anticipating Bank Rate movements
Inflation Indicators
The Bank of England aims to keep inflation at a 2% target. Watch for monthly CPI releases. If inflation consistently runs above 2%, the MPC is more likely to increase rates.
Economic Data Releases
Key indicators include GDP growth, employment statistics, wage growth, and retail sales. Strong economic data may signal rate increases.
MPC Member Statements
Pay attention to speeches from MPC members and the Bank of England Governor. The MPC publishes minutes from each meeting explaining their reasoning.
For official information, visit the Bank of England's Monetary Policy page.
