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Bank Rate is the single most important interest rate in the UK. In the news, it's sometimes called the ‘Bank of England base rate’ or even just ‘the interest rate’. Our Monetary Policy Committee (MPC) sets Bank Rate.
At its meeting ending on 15 June 2022, the MPC voted by a majority of 6-3 to increase Bank Rate by 0.25 percentage points, to 1.25%. Those members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 1.5%.
What is Bank Rate? It is the core interest rate in the UK and it is our job to set it. It is the rate of interest we pay to high street banks that hold money with us and, therefore, influences their own lending and savings rates.
The Bank of England sets Bank Rate. It’s also sometimes known simply as ‘the interest rate’. Bank Rate influences the level of all other interest rates in the UK. Bank Rate was almost zero (0.1%) at the beginning of December 2021. It is 4.75% now. In the years between 1975 and 2007, Bank Rate was 3.5% at its lowest point and 17% at its ...
The primary tool we use is Bank Rate. This is the interest rate we pay on deposits placed with us overnight by eligible firms such as commercial banks. Additionally, when required, we can buy bonds to bring down long-term interest rates on savings and loans through quantitative easing (QE).
Dates for Monetary Policy Committee (MPC) announcements on Bank Rate and publication of MPC meeting minutes and the quarterly Monetary Policy Report.
Why are interest rates high and how quickly might they fall? We need to make sure inflation stays low. So we need to be careful not to cut rates too quickly or by too much.
Bank Rate should be increased by 0.15 percentage points, to 0.25%; The Bank of England should maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion;
At its meeting ending on 14 December 2022, the MPC voted by a majority of 6-3 to increase Bank Rate by 0.5 percentage points, to 3.5%. Two members preferred to maintain Bank Rate at 3%, and one member preferred to increase Bank Rate by 0.75 percentage points, to 3.75%.
Our quarterly Monetary Policy Report sets out the economic analysis and inflation projections that the Monetary Policy Committee uses to make its interest rate decisions.