Bank of England Base Rate Tracker: Live UK Interest Rate

Last updated: 11 May 2026. The Bank of England's Monetary Policy Committee (MPC) most recently cut the Bank Rate to 3.75% on 18 December 2025. The next MPC decision is scheduled for 18 June 2026. This page is the canonical UK reference for the Bank Rate: it tracks every MPC change, explains how the nine-member committee decides, breaks down what each move means for mortgages, savings, loans, and the wider economy, and sets the current rate in the context of three centuries of Bank Rate history.

What is the Bank of England Base Rate?

The Bank Rate, often called the Bank of England base rate or simply the UK interest rate, is the rate the Bank of England pays to commercial banks holding reserves with it. It is the single most important interest rate in the UK economy because it sets the floor for nearly every other rate. Mortgage rates, savings rates, business loans, credit card APRs, and gilt yields are all anchored to it, directly or indirectly.

The rate is set by the nine-member Monetary Policy Committee (MPC). The MPC meets eight times a year, roughly every six weeks, and votes on whether to raise, lower, or hold the rate. Its statutory remit, set by HM Treasury, is to keep CPI inflation at 2%. When inflation runs hot, the MPC tends to raise rates to cool demand. When inflation undershoots or growth stalls, it tends to cut. The committee operates a "flexible inflation target" mandate that explicitly allows it to look through temporary shocks and to weigh output and employment costs against the speed of inflation's return to target.

Why the Bank Rate matters to you

A change of 0.25 percentage points in the Bank Rate may sound modest, but on a £200,000 25-year mortgage it shifts monthly repayments by roughly £25 to £30 once lenders pass it through. Multiplied across the roughly 9 million UK mortgaged households, savings balances over £1.7 trillion, and consumer credit balances above £200 billion, every quarter-point move reshapes household budgets and the wider economy.

The Bank Rate is also a price signal. Falling rates encourage borrowing and discourage saving; rising rates do the reverse. For businesses, the rate sets the hurdle for capital investment decisions: a lower Bank Rate means a wider range of projects clear the cost-of-capital threshold. For investors, the rate anchors discount rates used to value equities, bonds, and property.

Current Bank Rate: 3.75%

As of 11 May 2026, the Bank of England Bank Rate stands at 3.75%. The most recent MPC decision on 18 December 2025 was a cut.

What the cut signals depends on the wider context. A cut typically reflects easing inflation or weakening growth, and prompts lenders to lower variable-rate mortgages and savings products within days. A hike signals concern about inflation persistence, and tightens credit conditions. A hold means the MPC believes current policy is already at, or near, the level needed to bring inflation back to 2% on its forecast horizon.

How quickly does a rate change flow through?

• Tracker and variable mortgages: Usually within 30 to 90 days. Tracker mortgages move automatically; standard variable rate (SVR) changes are at the lender's discretion but typically follow within one billing cycle.
• Fixed-rate mortgages: Existing fixed deals are unaffected. New fixed-rate quotes reprice within hours or days based on swap rates, which often move before the MPC vote.
• Easy-access savings: Lenders pass on cuts faster than rises. A 0.25-point cut may show up within two weeks; a 0.25-point rise can take a month or longer.
• Credit cards and overdrafts: APRs adjust at lender review periods, usually quarterly. Personal loan rates for new applications reprice within weeks.
• Business lending: Most commercial loans are referenced to Bank Rate or SONIA, so the pass-through is near-immediate on new drawdowns.
• Gilt yields: Move in real time on expectations, often before the MPC announces. The two-year gilt is the most sensitive maturity.

MPC Decision History

The table below lists the most recent Bank Rate changes. A change is recorded only when the rate moves; meetings ending in a hold are not separate rows but are reflected in the gap between dated entries. For the full historical series back to 1694, see the Bank of England Statistical Database linked in the sources section.

Historical Analysis: Bank Rate Through the Decades

The Bank Rate has existed in some form since the Bank of England's founding in 1694. For most of that history it served narrow monetary-financial purposes: defending the gold standard, managing wartime borrowing, regulating commercial bank reserves. The modern role of the Bank Rate as the primary tool of macroeconomic stabilisation dates from 1997, when operational independence over interest rates was transferred from HM Treasury to the newly created MPC.

1980s and early 1990s: high inflation, high rates

The Bank Rate spent most of the 1980s in double digits, peaking at 17% in November 1979 under Margaret Thatcher's monetarist disinflation programme. Through the 1980s rates remained between 9% and 15%, reflecting persistent inflation and sterling weakness. The 1992 Exchange Rate Mechanism (ERM) crisis saw rates briefly hiked to 15% on 16 September 1992 ("Black Wednesday") in a failed attempt to defend sterling's parity in the ERM.

1997 to 2007: the Great Moderation

The first decade of MPC independence saw a long period of low and stable inflation, with the Bank Rate ranging between 3.5% and 7.5%. Inflation expectations became well-anchored at the 2% target (originally 2.5% on the RPIX measure, switched to 2% CPI in December 2003). This was the era economists called the "Great Moderation": low inflation volatility, steady growth, falling unemployment.

2008 to 2009: the financial crisis

The collapse of Lehman Brothers in September 2008 triggered the most aggressive easing cycle in the Bank Rate's history. The rate fell from 5% in September 2008 to 0.5% by March 2009, a cumulative cut of 4.5 percentage points in six months. The Bank also launched its first programme of quantitative easing (QE), purchasing gilts to inject reserves into the banking system once the Bank Rate could go no lower without distorting money markets.

2009 to 2021: the long flat-line

From March 2009 to August 2018 the Bank Rate remained at 0.5%, the lowest in the Bank's 315-year history at the time. A single 0.25-point rise in November 2017 was reversed in March 2020 as the COVID-19 pandemic struck. The rate touched a new all-time low of 0.10% from March 2020 to December 2021, alongside the largest QE programme in UK history.

2021 to 2023: the fastest tightening cycle in three decades

From December 2021 the MPC began raising rates in response to post-pandemic supply shocks and the energy price spike that followed Russia's invasion of Ukraine in February 2022. The Bank Rate climbed from 0.10% to 5.25% by August 2023, a rise of 5.15 percentage points across 14 consecutive meetings. CPI inflation peaked at 11.1% in October 2022, the highest in 41 years, before the tightening cycle and falling energy prices brought it back to target.

2024 onwards: gradual easing

From mid-2024 the MPC began easing as headline CPI returned to target. The pace of cuts has been deliberate rather than aggressive, reflecting MPC concern about services inflation and wage growth remaining sticky even as energy and goods prices fell. The trajectory through 2025 and into 2026 has been described in MPC communications as "gradual and cautious", a deliberate contrast with the rapid 2008 to 2009 easing.

How the MPC Decides

The Monetary Policy Committee comprises nine members: the Governor, three Deputy Governors (Monetary Policy, Financial Stability, Markets and Banking), the Bank's Chief Economist, and four external members appointed by the Chancellor for fixed terms. Each member has one vote. Decisions are taken by majority; the Governor casts a deciding vote in the event of a tie, though this is rare.

The MPC's information set

Ahead of each decision, the MPC reviews a wide range of data and analysis:

• CPI inflation: Headline, core (excluding food and energy), and services inflation, published monthly by the Office for National Statistics.
• Labour market data: Unemployment rate, vacancy-to-unemployment ratio, average weekly earnings (regular pay growth), and HMRC payrolled employees series.
• GDP and activity: Monthly and quarterly GDP, PMI surveys, retail sales, and the Bank's Agents' summary of business conditions across 12 regions.
• Financial conditions: Sterling exchange rate, gilt yields, mortgage approvals, consumer and business lending growth, and equity market levels.
• The Bank's own forecasts: Published quarterly in the Monetary Policy Report, with two- and three-year-ahead projections for CPI, GDP, and unemployment under market-implied and constant-rate paths.
• International developments: US Federal Reserve and European Central Bank policy paths, global commodity prices, and trade flows.

Reading the voting record

Each MPC member's vote is published with the minutes immediately after the decision. A 9 to 0 vote signals strong committee consensus; a 5 to 4 split signals a finely-balanced decision and often presages a different outcome at the next meeting. Markets read voting splits as a leading indicator of the next move.

External members historically vote more often than internal members for "off-consensus" positions, partly because they are not part of the Bank's executive and partly because they are appointed precisely to bring outside perspectives. Long-running splits between hawks (typically favouring tighter policy) and doves (favouring looser policy) emerge across committee terms; the median voter usually carries the decision.

The MPC's tools beyond the Bank Rate

The Bank Rate is the primary tool, but the MPC has access to two others:

• Quantitative easing and tightening: Purchases or sales of UK government bonds (gilts) financed by central bank reserves. The Bank has run an active programme of quantitative tightening since 2022, reducing its stock of gilts by both passive runoff (not reinvesting maturing bonds) and active sales.
• Forward guidance: Communication about the likely future path of the Bank Rate, designed to influence expectations and so to influence longer-term interest rates today. The MPC uses conditional language ("data-dependent", "for an extended period") rather than calendar commitments.

Impact on Mortgages

For most UK households the Bank Rate's direct effect is felt through their mortgage. The pass-through depends on which type of deal you hold.

Tracker mortgages

A tracker explicitly follows Bank Rate plus a margin, for example "Bank Rate plus 0.74%". When the Bank Rate changes, the mortgage rate changes automatically, usually from the start of the next month. If you are on a tracker at the current 3.75% Bank Rate plus a 0.74% margin, your effective mortgage rate is 4.49%.

Standard Variable Rate (SVR)

SVRs are set by each lender and tend to be 3 to 4 percentage points above Bank Rate. Lenders are not contractually obliged to move SVRs in lockstep with the MPC, but competitive and political pressure usually forces a similar move. SVR borrowers are the most exposed to rate volatility and typically pay the highest rates of any mortgage segment.

Fixed-rate mortgages

Existing fixed deals are insulated from the Bank Rate for the duration of the fixed term. The Bank Rate matters for fixed borrowers in two situations: when remortgaging at the end of the term, and when negotiating a new purchase. New fixed-rate pricing is driven primarily by swap rates (the rates at which banks lend to each other for fixed periods), which respond to expectations about future Bank Rate moves rather than the current level.

This is why fixed-rate quotes can fall even on the day the MPC holds rates, if markets revise their expectations of future cuts. The two-year and five-year swap curves are the relevant benchmarks for two-year and five-year fixed mortgages respectively. A flat or inverted swap curve, where short-dated rates exceed long-dated rates, signals market expectations of substantial future easing.

Worked example: monthly payment impact

On a £200,000 repayment mortgage over 25 years:

• At 4.50% the monthly payment is approximately £1,112.
• At 4.25% the monthly payment is approximately £1,083, a saving of £29 per month or £348 per year.
• At 5.00% the monthly payment is approximately £1,169, £57 more than at 4.50%.
• At 3.75% (the current Bank Rate, before lender margin) a notional mortgage at exactly Bank Rate would cost £1,028. In practice mortgages price 0.5 to 2 points above Bank Rate.

Over a typical five-year fixed term, a 0.25-point lower rate saves around £1,740 in interest on a £200,000 balance. Borrowers approaching a remortgage should track the Bank Rate trajectory and swap rate movements in the weeks before locking in.

Impact on Savings

Savings rates move in the opposite direction to the mortgage rates above. A Bank Rate cut compresses the margin banks can earn on deposits, so easy-access and notice account rates typically fall within a fortnight. A rise usually takes longer to pass through, particularly on existing accounts.

Best and worst savings products by speed of pass-through

• Fastest pass-through (cuts): Easy-access savings, ISA easy-access, money market funds.
• Slowest pass-through (cuts): Fixed-rate bonds (existing balances locked in until maturity), Premium Bonds prize fund rate (NS&I reviews periodically), regular saver accounts (rates often guaranteed for 12 months).
• Fastest pass-through (rises): Challenger bank easy-access products, new fixed-rate bond issuances.
• Slowest pass-through (rises): High-street bank easy-access accounts, NS&I products other than Premium Bonds.

For savers, the practical implication is that fixed-rate bonds become more attractive immediately before an expected cut, since the locked-in rate is preserved. They become less attractive immediately before an expected rise.

Premium Bonds and NS&I

NS&I product rates, including the Premium Bonds prize fund rate, are reviewed by HM Treasury and reset periodically rather than tracking the Bank Rate automatically. NS&I rate changes typically lag MPC decisions by one to three months. Because NS&I has a government-set funding target, rate changes also reflect the Treasury's desired retail funding mix, not just market conditions.

Impact on Borrowing, Cards, and Loans

Unsecured borrowing rates respond to Bank Rate moves through two channels: the lender's funding cost (which falls or rises with the Bank Rate) and the lender's view of credit risk (which is partly correlated with the macro environment that drove the rate change).

• Personal loans: Headline rates for new applications typically move within four to six weeks of an MPC decision. Existing fixed-term personal loans are unaffected.
• Credit cards: APRs on existing accounts may change at the lender's discretion with notice. New-account headline rates respond within weeks.
• Overdrafts: Authorised overdraft APRs (often 35% to 40%) are dominated by risk pricing rather than the Bank Rate; small Bank Rate moves rarely show up.
• Car finance (PCP/HP): Pricing is set by manufacturer finance arms and reprices on rate cards every few months. Changes lag MPC decisions by one to three months.
• Buy-now-pay-later: Zero-interest BNPL is largely insensitive to the Bank Rate. Interest-bearing BNPL (where it exists) reprices in line with credit card APRs.

Impact on Business Borrowing

Commercial lending is far more directly tied to the Bank Rate than consumer credit. Most business loans, overdrafts, and asset finance facilities are priced as "SONIA plus margin" or "Bank Rate plus margin", so changes pass through on the next interest reset date, typically monthly or quarterly.

Effects by business segment

• SMEs with floating-rate debt: Direct cash impact from the first interest reset after an MPC move. Larger SMEs often use interest rate swaps to hedge; smaller ones rarely do.
• Commercial property: Highly sensitive. Yields on commercial property are benchmarked against gilt yields plus a risk premium, so falling Bank Rate expectations support property valuations.
• Export-focused businesses: Indirect impact via sterling. A surprise cut tends to weaken sterling against the dollar and euro, supporting exporters' margins. A surprise hike does the reverse.
• Cash-rich businesses: Treasury deposit and money market fund returns track Bank Rate closely. A cut reduces interest income on corporate cash balances.
• Leveraged buyouts and private equity: Highly geared portfolio companies feel the full pass-through. A 1-point shift in the Bank Rate moves interest expense by 1 point on the full debt stack.

Impact on the Wider UK Economy

Sterling and the foreign exchange rate

The pound's value against other currencies is influenced by the differential between UK and foreign interest rates. When the MPC cuts faster than the US Federal Reserve or European Central Bank, sterling tends to weaken. This raises the price of imports (and so contributes to inflation) but supports exporters and overseas earnings of FTSE 100 companies. Roughly 75% of FTSE 100 revenue is earned outside the UK, which is why FTSE indices can move counter-intuitively to UK economic news.

House prices

House prices are influenced by mortgage affordability, which is a function of the Bank Rate and lender pricing decisions. Falling rates ease affordability constraints and tend to support transaction volumes and prices. Rising rates do the reverse, but the effect is asymmetric: rate rises typically dampen transactions before they dampen prices, because sellers are slow to accept lower offers.

Gilt yields and government borrowing costs

Two-year gilt yields are tightly correlated with Bank Rate expectations. Ten-year gilt yields, which set the benchmark cost of long-term government borrowing, are influenced by Bank Rate expectations plus a term premium reflecting uncertainty about the long-run path. A surprise MPC move usually shifts the entire gilt curve.

Inflation

The MPC's primary transmission channel runs through the labour market and demand. Higher rates compress household disposable income (through mortgages) and business investment, which slows hiring and wage growth, which feeds back into services inflation. The Bank's own estimates put the full pass-through lag at 18 to 24 months from a rate change to its peak inflation effect.

International Comparison: UK, US, and Eurozone

The Bank Rate is one of three major developed-market policy rates closely watched in markets, alongside the US Federal Reserve's federal funds target range and the European Central Bank's deposit facility rate. Each central bank pursues a similar inflation target (2%) but uses different operating frameworks, balance sheet policies, and communication styles.

Federal Reserve (United States)

The Fed sets a target range for the federal funds rate (e.g., 4.25% to 4.50%) rather than a single point rate. Its dual mandate covers both price stability and maximum employment, which gives the Federal Open Market Committee (FOMC) explicit licence to weigh unemployment against inflation. The Fed publishes a "dot plot" of individual FOMC members' rate projections four times a year, a level of forward-looking transparency the MPC does not match.

European Central Bank (eurozone)

The ECB sets three rates: the deposit facility rate (the main policy rate), the main refinancing operations rate, and the marginal lending facility rate. Its mandate is price stability defined as 2% inflation, without a formal employment mandate. The ECB Governing Council includes the heads of national central banks of all 20 eurozone members, making it a much larger committee than the MPC.

How the UK has compared

Historically, the Bank Rate has run between the eurozone deposit rate and the US federal funds rate during easing cycles, and above the eurozone but below the US during tightening. The UK is more open to trade than the US (exports plus imports as a share of GDP), so sterling and import-price effects feature more prominently in MPC deliberations than they do at the Fed.

Market Expectations and Forward Guidance

Markets price in MPC decisions before they happen. The OIS (overnight index swap) curve, derived from interbank lending rates, gives a real-time market-implied path for the Bank Rate over the next two to three years. The Bank publishes its forecasts conditional on this market path in each Monetary Policy Report.

Forward guidance from the MPC is deliberately conditional. The Bank avoids committing to specific future moves and instead frames decisions as "data-dependent". Markets infer the likely path from MPC speeches, voting patterns, and the language of the minutes. Phrases like "monetary policy will need to remain restrictive for an extended period" or "the case for further restraint has diminished" are read closely.

What Could Move the Bank Rate Next?

Data that could trigger a cut

• Services CPI inflation falling sustainably below 3.5%.
• Regular pay growth (private sector, excluding bonuses) falling below 3.5%.
• Unemployment rising above 4.7% on the ONS Labour Force Survey measure.
• A material downside surprise in monthly GDP or PMI surveys.
• Sterling appreciation that tightens financial conditions independently.

Data that could trigger a hold or delay further cuts

• Services inflation sticky above 4%.
• Pay growth re-accelerating, particularly in the services sector.
• Sterling depreciation feeding through to import prices.
• Energy price shocks (gas, oil) reversing the recent disinflation in goods.
• Fiscal loosening at the Budget or Autumn Statement that adds to demand.

Disclaimer

This page is for general information only and does not constitute financial, legal, tax, or investment advice. The Bank of England's Bank Rate and Monetary Policy Committee decisions are subject to change at each MPC meeting. Mortgage, savings, and lending product rates depend on each provider's pricing decisions, your individual circumstances, and credit assessment. Always check current rates with the provider and seek regulated advice from an FCA-authorised firm before making a financial decision. Past rate movements are not a reliable guide to future MPC decisions.

Frequently Asked Questions

What is the current Bank of England base rate?

The current Bank Rate is 3.75%, set by the Monetary Policy Committee on 18 December 2025. The next MPC decision is scheduled for 18 June 2026.

How often does the MPC meet?

The Monetary Policy Committee meets eight times a year, roughly every six weeks. The dates are published a year in advance on the Bank of England website. Decisions are announced at midday (12:00 UK time) on the day of the meeting, along with the minutes and, four times a year, the Monetary Policy Report.

What is the difference between the Bank Rate and SONIA?

The Bank Rate is the policy rate set by the MPC. SONIA (Sterling Overnight Index Average) is the rate at which banks actually lend to each other overnight in the sterling market. SONIA tracks the Bank Rate very closely (usually within a few basis points) but is a market rate rather than an administered rate. Most floating-rate corporate loans now reference SONIA rather than the discontinued LIBOR.

Does the Chancellor or Prime Minister set the Bank Rate?

No. The Bank of England has been operationally independent since 1997. The MPC sets Bank Rate to meet the inflation target. The Chancellor sets the inflation target and writes annually to the Governor to confirm or amend it. The Treasury cannot direct the MPC's vote.

What happens if inflation overshoots the 2% target?

If CPI inflation deviates from the 2% target by more than 1 percentage point in either direction, the Governor must write an open letter to the Chancellor explaining why, what the MPC is doing about it, and how long it will take to return to target. These letters became frequent during the 2022 to 2023 inflation surge and are published on the Bank's website.

How does the Bank Rate compare internationally?

The Bank Rate is one of three major developed-market policy rates closely watched in markets, alongside the US Federal Reserve's federal funds target range and the European Central Bank's deposit facility rate. Comparisons are imperfect because each central bank's mandate, transmission mechanism, and balance sheet policy differ. The UK has historically run slightly tighter monetary policy than the eurozone but looser than the US during disinflation phases.

What was the highest Bank Rate ever?

The Bank Rate peaked at 17% in November 1979 under the Thatcher government's monetarist disinflation programme. It also briefly touched 15% on 16 September 1992, "Black Wednesday", in a failed attempt to defend sterling's parity in the European Exchange Rate Mechanism.

What was the lowest Bank Rate ever?

The all-time low was 0.10%, in place from 19 March 2020 to 16 December 2021, during the COVID-19 pandemic. Before March 2020 the previous low was 0.25%, set in August 2016 after the EU referendum.

Sources and Further Reading

• Bank of England — Monetary Policy
• Bank of England Statistical Database — Bank Rate (full history)
• Bank of England — Upcoming MPC dates
• Bank of England — Monetary Policy Report (quarterly)
• Office for National Statistics — Inflation and price indices
• HM Treasury — MPC remit letter
• Federal Reserve — Open Market Operations and federal funds rate
• European Central Bank — Key ECB interest rates

Page last refreshed from primary sources on 11 May 2026. The Bank Rate, MPC vote splits, and forecast paths shown here are taken directly from Bank of England publications.