Bank of England base rate

In the United Kingdom, the official bank rate is the rate that the Bank of England charges banks and financial institutions for loans with a maturity of 1 day. It is the Bank of England's key interest rate for enacting monetary policy. It is more analogous to the US discount rate than to the federal funds rate. The security for the lending can be any of a list of eligible securities (commonly gilts) and the transactions are overnight repurchase agreements. Changes are recommended by the Monetary Policy Committee and enacted by the Governor.

On 2 August 2018 the Bank of England base rate was increased to 0.75%, but then cut to 0.25% on 11 March 2020, and shortly thereafter to an all-time low of 0.1% on 19 March, as emergency measures during the COVID-19 pandemic. On 15 December 2021, the Monetary Policy Committee voted 8-1 to increase the bank rate to 0.25%, and subsequently increased it thirteen more times to 5.25% on 02 August 2023. As of 21 August 2024 the bank rate sits at 5%.