Bank of England Base Rate

Bank Rate is the Bank of England's core interest rate for the UK. The Bank pays interest at this rate to the banks and building societies that keep money with it, and charges it on any loans it makes to them. That is why it affects the rates banks themselves pay and charge, and through them what customers are offered, even though you never pay or earn Bank Rate itself.

Bank Rate is not the rate on your mortgage or savings account

Lenders and savings providers set their own rates, and they follow Bank Rate in different ways. Savings rates usually move in the same direction as Bank Rate. A standard variable rate is usually set with Bank Rate in mind, but it doesn't have to change by the same amount or on the same day. A fixed rate looks ahead: it reflects where lenders expect Bank Rate to go, so it can move before Bank Rate does, or without Bank Rate moving at all.

The Monetary Policy Committee decides it at eight meetings a year

Bank Rate is decided by the Bank's Monetary Policy Committee (MPC), whose job is to keep inflation low and stable. The committee meets eight times a year. At each meeting it judges whether Bank Rate should change or stay where it is, so that inflation returns to its target, or stays there, over time.

How a change in Bank Rate reaches prices

A change in interest rates alters what people can afford to spend, and that in turn shapes the prices businesses can charge. When Bank Rate is higher, loans cost more and savings earn more, so people and businesses tend to spend less and price rises slow down. When it is lower, the pattern reverses: borrowing is cheaper, saving pays less, spending picks up and prices tend to rise faster.

The Bank publishes Bank Rate history back to 1694

The Bank publishes official Bank Rate history data going back to 1694, as a downloadable spreadsheet. Its online history table lists each change from 1975.