UK Interest Rates
The current basic BoE interest rate is 5.25% as of 2023-11-02. You can find the latest UK interest rates analytics and data on MacroVar.
|UK Interest Rate
|GBP LIBOR 1 Month
|GBP LIBOR 3 Months
|GBP LIBOR 6 Months
UK Interest Rates Chart
What are UK Interest Rates
The official bank rate
The official bank rate is the key interest rate in the UK. It is set by the Bank of England's Monetary Policy Committee (MPC), which meets eight times a year to decide whether to change it or not.
The official bank rate is the rate that the Bank of England charges banks and financial institutions for loans with a maturity of one day. It is also known as the Bank Rate or the base rate.
The official bank rate influences other interest rates in the economy, such as the lending and saving rates offered by high street banks and building societies. The Bank of England uses its influence to keep inflation low and stable, which is its main objective.
How does the official bank rate affect you?
If the official bank rate changes, then normally banks change their interest rates on saving and borrowing as well. But not always by the same amount or at the same time.
If the official bank rate goes up, borrowing becomes more expensive and saving becomes more rewarding. This means that people are likely to borrow less and save more, which reduces the demand for goods and services. This can help to lower inflation if it is too high.
If the official bank rate goes down, borrowing becomes cheaper and saving becomes less rewarding. This means that people are likely to borrow more and save less, which increases the demand for goods and services. This can help to boost inflation if it is too low.
However, other factors also affect how much people borrow and save, such as their income, confidence, expectations and preferences. And other factors also affect how banks set their interest rates, such as their costs, profits, competition and risk.
So, the relationship between the official bank rate and other interest rates is not straightforward or predictable. It depends on how banks and people react to changes in the official bank rate and other economic conditions.