Bank of England policymakers voted unanimously to hold the Bank Rate at 0.75% and indicated that there would be fewer increases in borrowing costs in 2019 as the UK economy faces the weakest economic growth in 10 years amid persistent concerns about Brexit and a global slowdown. The central bank lowered its 2019 economic growth forecast to 1.2 percent from its previous estimate of 1.7 percent while inflation is expected to decline to slightly below the MPC’s 2 percent target in the near term, largely due to the sharp fall in petrol prices. Interest Rate in the United Kingdom averaged 7.54 percent from 1971 until 2019, reaching an all time high of 17 percent in November of 1979 and a record low of 0.25 percent in August of 2016.

Interest Rate in the United Kingdom is expected to be 0.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in the United Kingdom to stand at 1.00 in 12 months time. In the long-term, the United Kingdom Interest Rate is projected to trend around 1.75 percent in 2020, according to our econometric models.

United Kingdom Interest Rate
width
height
Forecast Data Chart
Trading Economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators, exchange rates, government bond yields, stock indexes and commodity prices.

The Trading Economics Application Programming Interface (API) provides direct access to our data. It allows API clients to download millions of rows of historical data, to query our real-time economic calendar, subscribe to updates and receive quotes for currencies, commodities, stocks and bonds.


Calendar GMT Actual Previous Consensus TEForecast
2019-02-07 12:00 PM BoE Interest Rate Decision 0.75% 0.75% 0.75% 0.75%
2019-02-07 12:00 PM BoE Quantitative Easing £435B £435B £435B £435B
2019-02-07 12:00 PM BoE MPC Vote Cut 0/9 0/9 0/9 0/9
2019-02-07 12:00 PM BoE MPC Vote Unchanged 9/9 9/9 9/9 9/9
2019-03-21 12:00 PM MPC Meeting Minutes
2019-03-21 12:00 PM BoE MPC Vote Cut 0/9 0/9 0/9
2019-03-21 12:00 PM BoE MPC Vote Unchanged 9/9 9/9 9/9



BoE Holds Rates

The Bank of England voted unanimously to hold the Bank Rate at 0.75 percent during its first policy meeting of 2019 and reaffirmed its pledge to gradual and limited rate rises over the forecast period. The central bank lowered its 2019 economic growth forecast to 1.2 percent from its previous estimate of 1.7 percent amid persistent concerns about Brexit uncertainty and global slowdown; while inflation is expected to decline to slightly below the MPC’s 2 percent target in the near term, largely due to the sharp fall in petrol prices.

Excerpts from the BoE Monetary Policy Summary:

The MPC’s latest projections for inflation and activity are set out in the accompanying February Inflation Report. They are conditioned on a smooth adjustment to the average of a range of possible outcomes for the UK’s eventual trading relationship with the European Union and the gently rising path of Bank Rate implied by market yields.

The world economy has continued to slow over recent months, with a broad-based softening across all regions. That deceleration reflects the past tightening in global financial conditions, as well as the initial impact of trade tensions on business sentiment. Global growth is expected to dip below trend in coming quarters, weighing on UK net trade, before rising to around potential rates. Activity is projected to be supported by the more accommodative monetary policies in all major economic areas that markets now expect.

UK economic growth slowed in late 2018 and appears to have weakened further in early 2019. This slowdown mainly reflects softer activity abroad and the greater effects from Brexit uncertainties at home. These uncertainties could lead to greater-than-usual short-term volatility in UK data, which may therefore provide less of a signal about the medium-term outlook. Heightened uncertainty and elevated bank funding costs are assumed to subside over time, as greater clarity on future trading arrangements is assumed to emerge. These developments, together with looser fiscal policy, provide support to domestic spending. In the Committee’s central projection, quarterly GDP growth recovers later this year, with four-quarter growth rising to 2% by the end of the forecast period.

CPI inflation fell to 2.1% in December and is expected to decline to slightly below the MPC’s 2% target in the near term, largely due to the sharp fall in petrol prices which has occurred since November. As that effect unwinds, CPI inflation rises above 2%. The MPC judges that demand and potential supply are currently broadly in balance. The weaker near-term outlook is likely to lead to a small margin of slack opening up this year. Thereafter, demand growth exceeds the subdued pace of supply growth and excess demand builds over the second half of the forecast period. As a result, domestic inflationary pressures firm, as the upward pressure on inflation of sterling’s past depreciation wanes. Under the assumptions that condition the February Report, inflation settles at a rate a little above the target.

The Committee judges that, were the economy to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon.

The economic outlook will continue to depend significantly on the nature of EU withdrawal, in particular: the new trading arrangements between the European Union and the United Kingdom; whether the transition to them is abrupt or smooth; and how households, businesses and financial markets respond. The appropriate path of monetary policy will depend on the balance of these effects on demand, supply and the exchange rate. The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction. The MPC judges at this month’s meeting that the current stance of monetary policy is appropriate. The Committee will always act to achieve the 2% inflation target.


Bank of England | Joana Ferreira | joana.ferreira@tradingeconomics.com
2/7/2019 12:19:31 PM



United Kingdom Money Last Previous Highest Lowest Unit
Interest Rate 0.75 0.75 17.00 0.25 percent [+]
Money Supply M0 82436.00 81931.00 82436.00 3529.00 GBP Million [+]
Money Supply M1 1767676.00 1772360.00 1781457.00 82310.00 GBP Million [+]
Interbank Rate 0.84 0.85 15.63 0.28 percent [+]
Money Supply M2 2405975.00 2412358.00 2415645.00 167429.00 GBP Million [+]
Money Supply M3 2875237.00 2915272.00 2915272.00 262973.00 GBP Million [+]
Foreign Exchange Reserves 174993.49 180845.18 180845.18 35190.42 USD Million [+]
Central Bank Balance Sheet 592313.00 592380.00 593590.00 76991.00 GBP Million [+]
Banks Balance Sheet 3781467.00 3785769.00 4060273.00 3342179.00 GBP Million [+]
Loans to Private Sector 2439096.00 2429967.00 2812988.00 8755.00 GBP Million [+]
Deposit Interest Rate 0.50 0.50 4.25 0.00 percent [+]
Lending Rate 1.00 1.00 4.75 0.50 percent [+]
Private Debt to GDP 229.40 228.80 247.70 157.30 percent [+]


United Kingdom Interest Rate

In the United Kingdom, benchmark interest rate is set by the Monetary Policy Committee (MPC). The Bank of England official interest rate is the repo rate. This repo rate applies to open market operations of the Bank of England with a group of counterparties (banks, building societies, securities firms). This page provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. United Kingdom Interest Rate - actual data, historical chart and calendar of releases - was last updated on March of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
0.75 0.75 17.00 0.25 1971 - 2019 percent Daily




Country Last Previous
Argentina 63.87 Mar/19
Turkey 24.00 Mar/19
Mexico 8.25 Feb/19
Russia 7.75 Feb/19
South Africa 6.75 Feb/19
Brazil 6.50 Mar/19
India 6.25 Feb/19
Indonesia 6.00 Feb/19
China 4.35 Feb/19
Saudi Arabia 3.00 Feb/19
United States 2.50 Mar/19
Canada 1.75 Mar/19
South Korea 1.75 Feb/19
Singapore 1.66 Feb/19
Australia 1.50 Mar/19
United Kingdom 0.75 Feb/19
Euro Area 0.00 Mar/19
France 0.00 Mar/19
Germany 0.00 Mar/19
Italy 0.00 Mar/19
Netherlands 0.00 Mar/19
Spain 0.00 Mar/19
Japan -0.10 Mar/19
Switzerland -0.75 Feb/19


Related

Latest