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

The Bank of England voted by six to two to keep the Bank Rate at a record low of 0.25 percent on August 3rd, 2017, as widely expected, saying GDP growth is expected to remain sluggish in the near term as the squeeze on households' real incomes continues to weigh on consumption. Also, the Committee voted unanimously to keep the stock of UK government bond purchases at £435 billion and the stock of sterling non-financial investment-grade corporate bond purchases at £10 billion. Meanwhile, the central bank cut its UK growth forecast for this year to 1.7 percent from an earlier estimate of 1.9 percent, while next year it predicts 1.6 percent growth compared to its previous 1.7 percent forecast. Interest Rate in the United Kingdom averaged 7.69 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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BoE Holds Bank Rate at 0.25%


The Bank of England voted by six to two to keep the Bank Rate at a record low of 0.25 percent on August 3rd, 2017, as widely expected, saying GDP growth is expected to remain sluggish in the near term as the squeeze on households' real incomes continues to weigh on consumption. Also, the Committee voted unanimously to keep the stock of UK government bond purchases at £435 billion and the stock of sterling non-financial investment-grade corporate bond purchases at £10 billion. Meanwhile, the central bank cut its UK growth forecast for this year to 1.7 percent from an earlier estimate of 1.9 percent, while next year it predicts 1.6 percent growth compared to its previous 1.7 percent forecast.

Excerpts from the BoE Monetary Policy Summary:

The MPC’s overall assessment of the outlook for inflation and activity in the August Inflation Report is broadly similar to that in May. In the MPC’s central forecast, GDP growth remains sluggish in the near term as the squeeze on households’ real incomes continues to weigh on consumption. Growth then picks up to just above its reduced potential rate over the balance of the forecast period. Net trade and business investment firm up, and consumption growth recovers in line with modestly rising household incomes. Net trade is bolstered by strong global growth and the past depreciation of sterling. The combination of high rates of profitability, especially in the export sector, the low cost of capital and limited spare capacity supports investment by UK firms over the forecast period, offsetting the effect of continued uncertainties around Brexit.

CPI inflation rose to 2.6% in June from 2.3% in March, as expected. The MPC expects inflation to rise further in coming months and to peak around 3% in October, as the past depreciation of sterling continues to pass through to consumer prices. Conditional on the current market yield curve, inflation is projected to remain above the MPC’s target throughout the forecast period. This overshoot reflects entirely the effects of the referendum-related falls in sterling. As the effect of rising import prices on inflation diminishes, domestic inflationary pressures gradually pick up over the forecast period. As slack is absorbed, wage growth is projected to recover. In addition, margins in the consumer sector, having been squeezed by the pickup in import prices, are projected to be rebuilt. Consequently, inflation remains at a level slightly above the 2% target. 

As in previous Reports, the MPC’s projections are conditioned on the average of a range of possible outcomes for the United Kingdom’s eventual trading relationship with the European Union. The projections also assume that, in the interim, households and companies base their decisions on the expectation of a smooth adjustment to that new trading relationship. Other important judgements include: that the lower level of sterling continues to boost consumer prices broadly as projected, and without adverse consequences for inflation expectations further ahead;  that regular pay growth remains modest in the near term but picks up over the forecast period; and that subdued household spending growth is largely balanced by a pickup in other components of demand. 

The Committee judges that, given the assumptions underlying its projections including the closure of the drawdown period of the TFS, and allowing for the effects of the recent prudential decisions of the Financial Policy Committee and the Prudential Regulation Authority, some tightening of monetary policy would be required to achieve a sustainable return of inflation to the target. Specifically, if the economy follows a path broadly consistent with the August central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the path implied by the yield curve underlying the August projections. 

In light of these considerations, six members thought that the current policy stance remained appropriate to balance the demands of the MPC’s remit. Two members considered it appropriate to increase Bank Rate by 25 basis points. All members agreed that any increases in Bank Rate would be expected to be at a gradual pace and to a limited extent. 

BoE | Joana Ferreira | joana.ferreira@tradingeconomics.com
8/3/2017 11:31:01 AM



Calendar GMT Actual Previous Consensus Forecast (i)
2017-08-03 11:00 AM BoE Quantitative Easing £435B £435B £435B £435B
2017-08-03 11:00 AM BoE Interest Rate Decision 0.25% 0.25% 0.25% 0.25%
2017-08-03 11:00 AM BoE MPC Vote Hike 2/8 3/8 2/8 3/8
2017-09-14 11:00 AM BoE Quantitative Easing £435B
2017-09-14 11:00 AM BoE Interest Rate Decision 0.25%
2017-09-14 11:00 AM MPC Meeting Minutes


United Kingdom Money Last Previous Highest Lowest Unit
Interest Rate 0.25 0.25 17.00 0.25 percent [+]
Interbank Rate 0.28 0.28 15.63 0.28 percent [+]
Money Supply M0 82355.00 82402.00 82402.00 3529.00 GBP Million [+]
Money Supply M1 1663350.00 1661888.00 1663350.00 82307.00 GBP Million [+]
Money Supply M2 1659400.00 1652235.00 1659400.00 114632.00 GBP Million [+]
Money Supply M3 2730061.00 2724725.00 2730061.00 262939.00 GBP Million [+]
Central Bank Balance Sheet 405132.00 404299.00 414839.00 77638.00 GBP Million [+]
Banks Balance Sheet 3860304.00 3785202.00 4060273.00 3342179.00 GBP Million [+]
Foreign Exchange Reserves 161311.29 150765.55 161311.29 35190.42 USD Million [+]
Loans to Private Sector 2370176.00 2320610.00 2813104.00 8755.00 GBP Million [+]
Deposit Interest Rate 0.00 0.00 4.25 0.00 percent [+]
Private Debt to GDP 230.51 224.96 241.34 153.37 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 August of 2017.

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



interest rate by Country

Last
Brazil 9.25 Jul/17
Russia 9.00 Jul/17
Turkey 8.00 Jul/17
Mexico 7.00 Aug/17
India 6.00 Aug/17
Indonesia 4.75 Jul/17
China 4.35 Jun/17
Australia 1.50 Aug/17
South Korea 1.25 Jul/17
United States 1.25 Jul/17
Canada 0.75 Jul/17
United Kingdom 0.25 Aug/17
Euro Area 0.00 Aug/17
France 0.00 Aug/17
Germany 0.00 Aug/17
Italy 0.00 Aug/17
Netherlands 0.00 Aug/17
Spain 0.00 Aug/17
Japan -0.10 Jul/17
Switzerland -0.75 Jul/17