United Kingdom Interest Rate  1971-2016 | Data | Chart | Calendar

The Bank of England Monetary Policy Committee voted unanimously to cut the Bank Rate to 0.25 percent on August 4th 2016, the first rate cut in seven years, in order to provide additional support to growth and to achieve a sustainable return of inflation to the target. The Committee also voted for a package of additional measures including: a new Term Funding Scheme to reinforce the pass-through of the cut in Bank Rate; the purchase of up to £10 billion of UK corporate bonds; and an expansion of the asset purchase scheme for UK government bonds of £60 billion, taking the total stock of these asset purchases to £435 billion. Interest Rate in the United Kingdom averaged 7.94 percent from 1971 until 2016, reaching an all time high of 99 percent in August of 2016 and a record low of 0.50 percent in March of 2009. Interest Rate in the United Kingdom is reported by the Bank of England.

United Kingdom Interest Rate
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Actual Previous Highest Lowest Dates Unit Frequency
0.25 0.50 17.00 0.25 1971 - 2016 percent Daily
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 August of 2016.


Calendar GMT Reference Actual Previous Consensus Forecast (i)
2016-08-04 11:00 AM BoE Interest Rate Decision 0.25% 0.5% 0.25% 0.25%
2016-08-04 11:00 AM BoE Quantitative Easing £435B £375B £375B £375B
2016-08-04 11:00 AM BoE MPC Vote Cut 9/9 1/9 8/9 6/9
2016-09-15 11:00 AM BoE Interest Rate Decision 0.25% 0.25%
2016-09-15 11:00 AM MPC Meeting Minutes
2016-09-15 11:00 AM BoE Quantitative Easing £435B £435B

BoE Cuts Bank Rate to Record Low of 0.25%


The Bank of England has launched a huge new stimulus package on August 4th in order to mitigate the damage the Brexit vote would have on the UK economy. The package includes: a 25 basis point cut in Bank Rate to 0.25%; a new Term Funding Scheme to reinforce the pass-through of the cut in Bank Rate; the purchase of up to £10 billion of UK corporate bonds; and an expansion of the asset purchase scheme for UK government bonds of £60 billion to £435 billion.

Excerpts from the Monetary Policy Summary:

The cut in Bank Rate will lower borrowing costs for households and businesses. However, as interest rates are close to zero, it is likely to be difficult for some banks and building societies to reduce deposit rates much further, which in turn might limit their ability to cut their lending rates. In order to mitigate this, the MPC is launching a Term Funding Scheme (TFS) that will provide funding for banks at interest rates close to Bank Rate. This monetary policy action should help reinforce the transmission of the reduction in Bank Rate to the real economy to ensure that households and firms benefit from the MPC’s actions.

The expansion of the Bank of England’s asset purchase programme for UK government bonds will impart monetary stimulus by lowering the yields on securities that are used to determine the cost of borrowing for households and businesses. It is also likely to trigger portfolio rebalancing into riskier assets by current holders of government bonds, further enhancing the supply of credit to the broader economy. 

Purchases of corporate bonds could provide somewhat more stimulus than the same amount of gilt purchases. In particular, given that corporate bonds are higher-yielding instruments than government bonds, investors selling corporate debt to the Bank could be more likely to invest the money received in other corporate assets than those selling gilts.

As set out in the August Inflation Report, conditional on this package of measures, the MPC expects that by the three-year forecast horizon unemployment will have begun to fall back and that much of the economy’s spare capacity will have been re-absorbed, while inflation will be a little above the 2% target. In those projections the cumulative growth in output is still around 2½% less at the end of the forecast period than in the MPC’s May projections. Much of this reflects a downward revision to potential supply that monetary policy cannot offset.  However, monetary policy can provide support as the economy adjusts. 

The MPC can act further along each of the dimensions of the package by lowering Bank Rate, by expanding the TFS to reinforce further the monetary transmission mechanism, and by expanding the scale or variety of asset purchases. If the incoming data prove broadly consistent with the August Inflation Report forecast, a majority of members expect to support a further cut in Bank Rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of the year.  The MPC currently judges this bound to be close to, but a little above, zero.

All members of the Committee agreed that policy stimulus was warranted at this time, and that Bank Rate should be reduced to 0.25% and be supported by a TFS.  Eight members supported the introduction of a corporate bond scheme, and six members supported further purchases of UK government bonds.


BoE | Joana Ferreira | joana.ferreira@tradingeconomics.com
8/4/2016 12:40:45 PM

United Kingdom Money Last Previous Highest Lowest Unit
Interest Rate 0.25 0.50 17.00 0.25 percent [+]
Interbank Rate 0.39 0.39 15.63 0.38 percent [+]
Money Supply M0 78369.00 77247.00 78369.00 3528.00 GBP Million [+]
Money Supply M1 1576279.00 1525176.00 1576279.00 82171.00 GBP Million [+]
Money Supply M2 1582684.00 1570935.00 1597469.00 114644.00 GBP Million [+]
Money Supply M3 2519868.00 2447421.00 2519868.00 263027.00 GBP Million [+]
Central Bank Balance Sheet 405132.00 404299.00 414839.00 77638.00 GBP Million [+]
Banks Balance Sheet 3467273.00 3418261.00 4060273.00 3343030.00 GBP Million [+]
Foreign Exchange Reserves 149048.33 143466.67 149048.33 35190.42 USD Million [+]
Loans to Private Sector 2192746.00 2166258.00 2812876.00 8755.00 GBP Million [+]
Deposit Interest Rate 0.00 0.00 4.25 0.00 percent [+]
Private Debt to GDP 220.15 225.99 248.43 163.52 percent [+]




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