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 December 15th, 2016, in order to meet the 2 percent inflation target, in a way that helps to sustain growth and employment. Policymakers reiterated that the path of monetary policy would depend on the evolution of the prospects for demand, supply, the exchange rate, and therefore inflation. The central bank expects inflation to rise to the 2 percent target within six months. Interest Rate in the United Kingdom averaged 7.77 percent from 1971 until 2016, 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)
2016-11-03 12:00 PM BoE Interest Rate Decision 0.25% 0.25% 0.25% 0.25%
2016-12-15 12:00 PM BoE Interest Rate Decision 0.25% 0.25% 0.25% 0.25%
2016-12-15 12:00 PM BoE Quantitative Easing £435B £435B £435B £435B
2017-02-02 12:00 PM BoE Quantitative Easing £435B%
2017-02-02 12:00 PM MPC Meeting Minutes
2017-02-02 12:00 PM BoE Interest Rate Decision 0.25%




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 December 15th, 2016, in order to meet the 2 percent inflation target, in a way that helps to sustain growth and employment. Policymakers reiterated that the path of monetary policy would depend on the evolution of the prospects for demand, supply, the exchange rate, and therefore inflation.

Since November, long-term interest rates have risen internationally, including in the United Kingdom. In part, this reflects expectations of looser fiscal policy in the United States which, if it materialises, will help to underpin the slightly greater momentum in the global economy evident in a range of data since the summer. At the same time, however, the global outlook has become more fragile, with risks in China, the euro area and some emerging markets, and an increase in policy uncertainty.

Domestically, data released since the Committee’s previous meeting continue to indicate that activity is growing at a moderate pace, supported by solid consumption growth.  Forward-looking components of business surveys are weaker than those regarding current output, however, suggesting that some slowing in activity is in prospect during 2017. The timing and extent of this slowing will depend crucially on the evolution of wages and how resilient household spending is to the pressure on real incomes from higher inflation.

Twelve-month CPI inflation stood at 1.2% in November, up from 0.9% in October and 1.0% in September. Looking forward, the MPC expects inflation to rise to the 2% target within six months. Since the Committee’s previous meeting, sterling’s trade-weighted exchange rate has appreciated by over 6%, while dollar oil prices have risen by 14%. All else equal, this would result in a slightly lower path for inflation than envisaged in the November Inflation Report, though it is still likely to overshoot the target later in 2017 and through 2018.

The MPC’s Remit requires that monetary policy should balance the speed with which inflation is returned to the target with the support for real activity. The lower level of sterling since the vote to leave the European Union has adversely affected that trade-off.  Sterling’s effect on CPI inflation will ultimately prove temporary and fully offsetting it would require exerting further downward pressure on domestic costs, including wages, and would therefore involve lost output and higher unemployment.  The Committee continues to judge that such outcomes would be undesirable and, consistent with its Remit, that it would therefore be appropriate to set policy so that inflation returns to its target over a longer period than the usual 18-24 months. 

Equally, there are limits to the extent to which above-target inflation can be tolerated.  Those limits depend, for example, on the cause of the inflation overshoot, the extent of second-round effects on domestic costs, the evolution of inflation expectations, and the scale of the shortfall in economic activity below potential.  Inflation expectations at medium-term horizons had been somewhat below their past average levels, reflecting the period of below-target inflation, although some measures have risen more recently.  The Committee continues to monitor the evolution of these expectations closely.

Earlier in the year, the Committee noted that the path of monetary policy following the referendum on EU membership would depend on the evolution of the prospects for demand, supply, the exchange rate, and therefore inflation. This remains the case. 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
12/15/2016 12:22:59 PM



United Kingdom Money Last Previous Highest Lowest Unit
Interest Rate 0.25 0.25 17.00 0.25 percent [+]
Interbank Rate 0.36 0.36 15.63 0.36 percent [+]
Money Supply M0 80449.00 80309.00 80449.00 3529.00 GBP Million [+]
Money Supply M1 1613935.00 1619406.00 1619406.00 82307.00 GBP Million [+]
Money Supply M2 1625798.00 1624172.00 1625798.00 114632.00 GBP Million [+]
Money Supply M3 2636269.00 2636311.00 2636311.00 262939.00 GBP Million [+]
Central Bank Balance Sheet 405132.00 404299.00 414839.00 77638.00 GBP Million [+]
Banks Balance Sheet 3544473.00 3527274.00 4060273.00 3342179.00 GBP Million [+]
Foreign Exchange Reserves 136586.00 139903.70 149048.33 35190.42 USD Million [+]
Loans to Private Sector 2243678.00 2226508.00 2813061.00 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 January of 2017.

Actual Previous Highest Lowest Dates Unit Frequency
0.25 0.25 17.00 0.25 1971 - 2016 percent Daily



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