United Kingdom Interest Rate  1971-2017 | Data | Chart | Calendar

The Bank of England Monetary Policy Committee voted unanimously to hold the Bank Rate at a record low of 0.25 percent and to leave the stock of purchased assets at £435 billion on February 2nd, 2017, saying inflation is likely to return to around the 2 percent target by February and then rise above it over the following months. Policymakers said that the continuing suitability of the current policy stance depends on the trade-off between above-target inflation and slack in the economy and that monetary policy can respond, in either direction, to changes to the economic outlook. Meanwhile, the MPC has raised growth forecasts to 2 percent from 1.4 percent this year. Interest Rate in the United Kingdom averaged 7.76 percent from 1971 until 2017, reaching an all time high of 17 percent in November of 1979 and a record low of 0.25 percent in August of 2016.

United Kingdom Interest Rate
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Calendar GMT Reference Actual Previous Consensus Forecast (i)
2016-12-15 12:00 PM BoE Interest Rate Decision 0.25% 0.25% 0.25% 0.25%
2017-02-02 12:00 PM BoE Interest Rate Decision 0.25% 0.25% 0.25% 0.25%
2017-02-02 12:00 PM BoE Quantitative Easing £435B £435B £435B £435B
2017-03-16 12:00 PM BoE Quantitative Easing £435B%
2017-03-16 12:00 PM BoE Interest Rate Decision 0.25%
2017-03-16 12:00 PM MPC Meeting Minutes




UK Leaves Monetary Policy Unchanged


The Bank of England Monetary Policy Committee voted unanimously to hold the Bank Rate at a record low of 0.25 percent and to leave the stock of purchased assets at £435 billion on February 2nd, 2017, saying inflation is likely to return to around the 2 percent target by February and then rise above it over the following months.

Excerpts from the Monetary Policy Summary:

The Committee’s latest economic projections are contained in the February Inflation Report. The MPC has increased its central expectation for growth in 2017 to 2.0% and expects growth of 1.6% in 2018 and 1.7% in 2019. The upgraded outlook over the forecast period reflects the fiscal stimulus announced in the Chancellor’s Autumn Statement, firmer momentum in global activity, higher global equity prices and more supportive credit conditions, particularly for households. Domestic demand has been stronger than expected over the past few months, and there have been relatively few signs of the slowdown in consumer spending that the Committee had anticipated following the referendum. Nevertheless, continued moderation in pay growth and higher import prices following sterling’s depreciation are likely to mean materially weaker household real income growth over the coming few years. As a consequence, real consumer spending is likely to slow.

The value of sterling remains 18% below its peak in November 2015, reflecting investors’ perceptions that a lower real exchange rate will be required following the UK’s withdrawal from the EU. Over the next few years, a consequence of weaker sterling is that the higher imported costs resulting from it will boost consumer prices and cause inflation to overshoot the 2% target. This effect is already becoming evident in the data. CPI inflation rose to 1.6% in December and further substantial increases are very likely over the coming months. In the central projection, conditioned on market yields that are somewhat higher than in November, inflation is expected to increase to 2.8% in the first half of 2018, before falling back gradually to 2.4% in three years’ time. Inflation is judged likely to return to close to the target over the subsequent year. 

Attempting to offset fully the effect of weaker sterling on inflation would be achievable only at the cost of higher unemployment and, in all likelihood, even weaker income growth. For this reason, the MPC’s remit specifies that in such exceptional circumstances the Committee must balance the trade-off between the speed with which it intends to return inflation to the target and the support that monetary policy provides to jobs and activity. At its February meeting, the MPC continued to judge that it remained appropriate to seek to return inflation to the target over a somewhat longer period than usual, and that the current stance of monetary policy remained appropriate to balance the demands of the Committee’s remit.

As the Committee has previously noted, however, there are limits to the extent that above-target inflation can be tolerated. The continuing suitability of the current policy stance depends on the trade-off between above-target inflation and slack in the economy. The projections described in the Inflation Report depend in good part on three main judgements: that the lower level of sterling continues to boost consumer prices broadly as expected, and without adverse consequences for expectations of inflation further ahead; that regular pay growth does indeed remain modest, consistent with the Committee’s updated assessment of the remaining degree of slack in the labour market; and that the hitherto resilient rates of household spending growth slow as real income gains weaken. Monetary policy can respond, in either direction, to changes to the economic outlook as they unfold to ensure a sustainable return of inflation to the 2% target.

Bank of England | Joana Ferreira | joana.ferreira@tradingeconomics.com
2/2/2017 12:53:48 PM



United Kingdom Money Last Previous Highest Lowest Unit
Interest Rate 0.25 0.25 17.00 0.25 percent [+]
Interbank Rate 0.35 0.35 15.63 0.35 percent [+]
Money Supply M0 81295.00 80449.00 81295.00 3529.00 GBP Million [+]
Money Supply M1 1625847.00 1613935.00 1625847.00 82307.00 GBP Million [+]
Money Supply M2 1630801.00 1625798.00 1630801.00 114632.00 GBP Million [+]
Money Supply M3 2636751.00 2636269.00 2636751.00 262939.00 GBP Million [+]
Central Bank Balance Sheet 405132.00 404299.00 414839.00 77638.00 GBP Million [+]
Banks Balance Sheet 3573670.00 3544473.00 4060273.00 3342179.00 GBP Million [+]
Foreign Exchange Reserves 142571.65 136586.00 149048.33 35190.42 USD Million [+]
Loans to Private Sector 2257725.00 2243682.00 2813062.00 8755.00 GBP Million [+]
Deposit Interest Rate 0.00 0.00 4.25 0.00 percent [+]
Private Debt to GDP 229.50 238.34 241.34 153.37 percent [+]



United Kingdom Interest Rate Notes

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). This page provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. United Kingdom Interest Rate - actual data, historical chart and calendar of releases - was last updated on February of 2017.

Actual Previous Highest Lowest Dates Unit Frequency
0.25 0.25 17.00 0.25 1971 - 2017 percent Daily



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