The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75 percent during its May policy meeting and reaffirmed its pledge to gradual and limited rate rises over the forecast period, despite the slowdown in global growth and ongoing Brexit uncertainties. Interest Rate in the United Kingdom averaged 7.51 percent from 1971 until 2019, reaching an all time high of 17 percent in November of 1979 and a record low of 0.25 percent in August of 2016.

Interest Rate in the United Kingdom is expected to be 0.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in the United Kingdom to stand at 1.00 in 12 months time. In the long-term, the United Kingdom Interest Rate is projected to trend around 1.75 percent in 2020, according to our econometric models.

United Kingdom Interest Rate
width
height
Forecast Data Chart
Trading Economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators, exchange rates, government bond yields, stock indexes and commodity prices.

The Trading Economics Application Programming Interface (API) provides direct access to our data. It allows API clients to download millions of rows of historical data, to query our real-time economic calendar, subscribe to updates and receive quotes for currencies, commodities, stocks and bonds.


Calendar GMT Actual Previous Consensus TEForecast
2019-05-02 11:00 AM BoE Interest Rate Decision 0.75% 0.75% 0.75% 0.75%
2019-05-02 11:00 AM BoE Quantitative Easing £435B £435B £435B £435B
2019-05-02 11:00 AM BoE MPC Vote Hike 0/9 0/9 0/9 0/9
2019-05-02 11:00 AM BoE MPC Vote Cut 0/9 0/9 0/9 0/9
2019-06-20 11:00 AM MPC Meeting Minutes
2019-06-20 11:00 AM BoE MPC Vote Cut 0/9 0/9
2019-06-20 11:00 AM BoE MPC Vote Hike 0/9 0/9



BoE Still Plans to Raise Rates

The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75 percent during its May policy meeting and reaffirmed its pledge to gradual and limited rate rises over the forecast period, despite the slowdown in global growth and ongoing Brexit uncertainties.

BoE Monetary Policy Summary:

The MPC has noted previously that UK data could be unusually volatile in the near term, due to shifting expectations about Brexit in financial markets and among households and businesses. GDP is expected to have grown by 0.5% in 2019 Q1, in part reflecting a larger-than-expected boost from companies in the United Kingdom and the European Union building stocks ahead of recent Brexit deadlines. That boost is expected to be temporary, however, and quarterly growth is expected to slow to around 0.2% in Q2. Smoothing through those developments, the underlying pace of GDP growth appears to be slightly stronger than previously anticipated, but marginally below potential. That subdued pace reflects the impact of the slowdown in global growth and ongoing Brexit uncertainties. The latter is having a particularly pronounced impact on business investment, which has been falling for a year. The MPC judges that there is currently a small margin of excess supply in the economy.      

In the MPC’s central projection, global growth stabilises around its potential rate and Brexit uncertainties subside gradually. Four-quarter UK GDP growth begins to pick up next year and rises to over 2% by the end of the forecast period. Business investment recovers and household spending continues to support demand growth, sustained by rising real incomes. GDP growth picks up above the subdued pace of potential supply growth, such that excess demand begins to build.  Excess demand rises above 1% of potential output by the end of the forecast period, notably higher than in the February Report, reflecting the support to demand provided by lower market interest rates and easier financial conditions more generally.

CPI inflation was 1.9% in March and is expected to be slightly further below the MPC’s 2% target during the first half of the forecast period, largely reflecting lower expected retail energy prices. The labour market remains tight, with the unemployment rate projected to decline to 3½% by the end of the forecast period. Annual pay growth has remained around 3½% and unit labour cost growth has strengthened to rates that are above historical averages. As excess demand emerges, domestic inflationary pressures are expected to firm, such that CPI inflation picks up to above the 2% target in two years’ time and is still rising at the end of the three-year forecast period.    

The Committee continues to judge that, were the economy to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon.

The economic outlook will continue to depend significantly on the nature and timing of EU withdrawal, in particular: the new trading arrangements between the European Union and the United Kingdom; whether the transition to them is abrupt or smooth; and how households, businesses and financial markets respond.  The appropriate path of monetary policy will depend on the balance of these effects on demand, supply and the exchange rate. The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction. The Committee will always act to achieve the 2% inflation target.


Bank of England | Joana Ferreira | joana.ferreira@tradingeconomics.com
5/2/2019 11:50:07 AM



United Kingdom Money Last Previous Highest Lowest Unit
Interest Rate 0.75 0.75 17.00 0.25 percent [+]
Money Supply M0 82269.00 82694.00 82694.00 3529.00 GBP Million [+]
Money Supply M1 1757584.00 1761779.00 1779123.00 82323.00 GBP Million [+]
Interbank Rate 0.80 0.80 15.63 0.28 percent [+]
Money Supply M2 2415570.00 2403750.00 2415570.00 167427.00 GBP Million [+]
Money Supply M3 2860012.00 2843833.00 2908245.00 262975.00 GBP Million [+]
Foreign Exchange Reserves 171971.37 169493.02 180845.18 35190.42 USD Million [+]
Central Bank Balance Sheet 592480.00 592364.00 597303.00 76991.00 GBP Million [+]
Banks Balance Sheet 3884694.00 3793092.00 4060273.00 3342179.00 GBP Million [+]
Loans to Private Sector 2439096.00 2429967.00 2812988.00 8755.00 GBP Million [+]
Deposit Interest Rate 0.50 0.50 4.25 0.00 percent [+]
Lending Rate 1.00 1.00 4.75 0.50 percent [+]
Private Debt to GDP 229.40 228.80 247.70 157.30 percent [+]


United Kingdom Interest Rate

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 May of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
0.75 0.75 17.00 0.25 1971 - 2019 percent Daily




Country Last Previous
Argentina 71.22 May/19
Turkey 24.00 Apr/19
Mexico 8.25 May/19
Russia 7.75 Apr/19
South Africa 6.75 May/19
Brazil 6.50 May/19
India 6.00 Apr/19
Indonesia 6.00 May/19
China 4.35 Apr/19
Saudi Arabia 3.00 Apr/19
United States 2.50 May/19
Singapore 2.24 Mar/19
Canada 1.75 Apr/19
South Korea 1.75 Apr/19
Australia 1.50 May/19
United Kingdom 0.75 May/19
Euro Area 0.00 Apr/19
France 0.00 Apr/19
Germany 0.00 Apr/19
Italy 0.00 Apr/19
Netherlands 0.00 Apr/19
Spain 0.00 Apr/19
Japan -0.10 Apr/19
Switzerland -0.75 Apr/19


Related

Latest