The Bank of England is the central bank of the UK. The Bank of England controls the money supply and sets interest rates. The base rate is the most important UK interest rate.

What is the UK base rate?

The Bank of England's base rate is the benchmark interest rate for the UK. The base interest rate is charged when the central bank lends to commercial banks and is also referred to as the bank rate or the base interest rate.

Who sets the UK base rate?

The Bank of England's Monetary Policy Committee (MPC) sets the base rate.

Read more on what the Bank of England do

Who's on the Bank of England's Monetary Policy Committee?

The Monetary Policy Committee (MPC) comprises nine members

  • The Governor
  • Three Deputy Governors
  • Chief Economist
  • Four external members who are appointed by the Chancellor of the Exchequer, also known as the Finance Minister

How often do the Bank of England meet to set the base rate?

The monetary policy committee meet every six weeks. There are eight meetings per year and the central bank committee decide the interest rate by majority decision.

How is the UK base rate decided?

The Bank of England committee members assess the current economic conditions to determine if the economy is overheating, underperforming or well balanced.

Generally, if the economy is growing too fast, the Bank of England will increase the base rate.

If the economy is slowing, contracting, or in a recession, the Bank of England will usually cut the base rate.

When did the Bank of England base rate last change?

On the 3rd of November 2022, the Bank of England increased the base rate to 3%.

The Monetary Policy Committee voted by a majority of 7-2 to increase the Bank Rate by 0.75 percent from the previous rate of 2.25%.

Will the Bank of England base rate rise?

On the 15th of December 2022, the Bank of England is expected to increase the bank rate by a further 50 basis points, or 0.5%, to 3.5%.

Economists currently expect the UK base rate to rise to 4.25% in early 2023.

Find out more about how the Bank of England affects exchange rates