Atlas Macro

Central banks

Bank Rate

The Bank of England's main interest rate, set by its nine-member Monetary Policy Committee. It is the rate paid on commercial banks' reserves at the Bank and influences mortgages, savings and borrowing across the UK.

Key points

  • Set at eight meetings a year to meet the government's 2% CPI inflation target.
  • Each committee member's vote is published, and split decisions are common.
  • Many UK mortgages are fixed for only two to five years, so changes reach households relatively quickly.

Example

A 5-4 vote to hold Bank Rate tells markets the committee is close to changing it, which can move gilt yields and sterling.

In history

Bank Rate was cut to 0.1% in March 2020, raised to 5.25% by August 2023 (the highest since 2008) as UK inflation peaked at 11.1%, and cut to 4% by August 2025.

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