March 2, 2024

The Bank of England's current base rate: a guide for businesses

What is the Bank of England's base interest rate?

The Bank of England's base interest rate is set by the UK's central bank, and is the rate used by major banks and other commercial lenders when setting their interest rates.

The Bank of England's Monetary Policy Committee meets eight times a year, with the committee voting on any changes to the base rate.

By setting the base rate, the Bank of England can respond to changes in the UK economy.

the The Bank of England's current base interest rate is 5.25 per cent It was held for the third time in a row. The Bank of England's interest rate decision will be announced after the Monetary Policy Committee meeting on 14 December 2023.

The Bank of England's next interest rate decision will be on February 1, 2024.

When will interest rates fall?

With the key interest rate remaining in place for the third time in a row, many are wondering when it will start falling. This depends on how long it takes for inflation to fall to the Bank of England's 2 per cent target. Interest rates affect the cost of borrowing money and the Bank of England raises them to reduce people's spending and lower inflation.

Economists appear to agree that interest rates should fall in the first half of 2024, with researchers from… Morgan Stanley He predicted that by the end of 2024, the base rate could reach 4.25 percent, with a decline starting in May.

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But the Bank of England was more than that Be careful with their expectations. “It is too early to start speculating about a rate cut,” said Andrew Bailey, Governor of the Bank of England. “We have to see more progress.”

The Bank of England's Monetary Policy Committee voted by six votes to three in favor of keeping the base interest rate at 5.25 percent, while the rest favored raising the interest rate. Although it looks like the end of interest rate hikes, the Bank of England is unlikely to rush to cut interest rates until it is sure that inflation is under control.