Policy interest rates in the U.S. and Europe are forecasted to decrease gradually between 2024 and 2027, following exceptional increases triggered by soaring inflation between 2021 and 2023. The U.S. federal funds rate stood at **** percent at the end of 2023, the European Central Bank deposit rate at **** percent, and the Swiss National Bank policy rate at **** percent. With inflationary pressures stabilizing, policy interest rates are forecast to decrease in each observed region. The U.S. federal funds rate is expected to decrease to *** percent, the ECB refi rate to **** percent, the Bank of England bank rate to **** percent, and the Swiss National Bank policy rate to **** percent by 2025. An interesting aspect to note is the impact of these interest rate changes on various economic factors such as growth, employment, and inflation. The impact of central bank policy rates The U.S. federal funds effective rate, crucial in determining the interest rate paid by depository institutions, experienced drastic changes in response to the COVID-19 pandemic. The subsequent slight changes in the effective rate reflected the efforts to stimulate the economy and manage economic factors such as inflation. Such fluctuations in the federal funds rate have had a significant impact on the overall economy. The European Central Bank's decision to cut its fixed interest rate in June 2024 for the first time since 2016 marked a significant shift in attitude towards economic conditions. The reasons behind the fluctuations in the ECB's interest rate reflect its mandate to ensure price stability and manage inflation, shedding light on the complex interplay between interest rates and economic factors. Inflation and real interest rates The relationship between inflation and interest rates is critical in understanding the actions of central banks. Central banks' efforts to manage inflation through interest rate adjustments reveal the intricate balance between economic growth and inflation. Additionally, the concept of real interest rates, adjusted for inflation, provides valuable insights into the impact of inflation on the economy.

The benchmark interest rate in the United States was last recorded at 4.25 percent. This dataset provides the latest reported value for - United States Fed Funds Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Based on an "illustrative scenario" in which the United Kingdom (UK) moves to a comprehensive free trade agreement with the European Union (EU) on the 1st of January 2021, this forecast shows the expected annual average bank base interest rate in response to the current Covid-19 pandemic. In a bid to minimize the economic effects of the Covid-19 virus, on the 19th of March 2020 the Bank of England cut the official bank base rate to a record low of 0.1 percent. This historic low came just one week after the Bank of England cut rates from 0.75 percent to 0.25 percent in a bid to prevent mass job cuts in the United Kingdom. In the current forecast scenario, bank interest rates are set to stay between 0.1 percent and 0.2 percent up to 2022.

The benchmark interest rate In the Euro Area was last recorded at 2.15 percent. This dataset provides - Euro Area Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The benchmark interest rate in Hungary was last recorded at 6.50 percent. This dataset provides the latest reported value for - Hungary Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

From 2003 to 2025, the central banks of the United States, United Kingdom, and European Union exhibited remarkably similar interest rate patterns, reflecting shared global economic conditions. In the early 2000s, rates were initially low to stimulate growth, then increased as economies showed signs of overheating prior to 2008. The financial crisis that year prompted sharp rate cuts to near-zero levels, which persisted for an extended period to support economic recovery. The COVID-19 pandemic in 2020 led to further rate reductions to historic lows, aiming to mitigate economic fallout. However, surging inflation in 2022 triggered a dramatic policy shift, with the Federal Reserve, Bank of England, and European Central Bank significantly raising rates to curb price pressures. As inflation stabilized in late 2023 and early 2024, the ECB and Bank of England initiated rate cuts by mid-2024, and the Federal Reserve also implemented its first cut in three years, with forecasts suggesting a gradual decrease in all major interest rates between 2025 and 2026. Divergent approaches within the European Union While the ECB sets a benchmark rate for the Eurozone, individual EU countries have adopted diverse strategies to address their unique economic circumstances. For instance, Hungary set the highest rate in the EU at 13 percent in September 2023, gradually reducing it to 6.5 percent by October 2024. In contrast, Sweden implemented more aggressive cuts, lowering its rate to two percent by June 2025, the lowest among EU members. These variations highlight the complex economic landscape that European central banks must navigate, balancing inflation control with economic growth support. Global context and future outlook The interest rate changes in major economies have had far-reaching effects on global financial markets. Government bond yields, for example, reflect these policy shifts and investor sentiment. As of December 2024, the United States had the highest 10-year government bond yield among developed economies at 4.59 percent, while Switzerland had the lowest at 0.27 percent. These rates serve as important benchmarks for borrowing costs and economic expectations worldwide.

JP: Short-Term Interest Rate data was reported at 1.321 % in 2026. This records an increase from the previous number of 0.821 % for 2025. JP: Short-Term Interest Rate data is updated yearly, averaging 0.836 % from Dec 1969 (Median) to 2026, with 58 observations. The data reached an all-time high of 14.512 % in 1974 and a record low of 0.060 % in 2017. JP: Short-Term Interest Rate data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Japan – Table JP.OECD.EO: Interest Rate: Forecast: OECD Member: Annual. IRS - Short-term interest rate; Japan interbank 3 mth (LDN:BBA) - offered rate. Available from 1986 onwards.

The benchmark interest rate in Poland was last recorded at 4.75 percent. This dataset provides - Poland Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Key Interest Rate: Central Banks data was reported at 3.350 % in 2026. This records a decrease from the previous number of 3.913 % for 2025. Key Interest Rate: Central Banks data is updated yearly, averaging 4.625 % from Dec 1990 (Median) to 2026, with 37 observations. The data reached an all-time high of 13.833 % in 1990 and a record low of 0.100 % in 2021. Key Interest Rate: Central Banks data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Australia – Table AU.OECD.EO: Interest Rate: Forecast: OECD Member: Annual.

The benchmark interest rate in Brazil was last recorded at 15 percent. This dataset provides - Brazil Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Key Interest Rate: Central Banks data was reported at 2.250 % in Dec 2026. This stayed constant from the previous number of 2.250 % for Sep 2026. Key Interest Rate: Central Banks data is updated quarterly, averaging 2.250 % from Sep 1994 (Median) to Dec 2026, with 130 observations. The data reached an all-time high of 8.910 % in Dec 1995 and a record low of -0.500 % in Sep 2018. Key Interest Rate: Central Banks data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Sweden – Table SE.OECD.EO: Interest Rate: Forecast: OECD Member: Quarterly.

Key information about Germany Long Term Interest Rate

• Germany Long Term Interest Rate: Month Avg: Germany: ECB Harmonised was reported at 2.41 % pa in Feb 2025, compared with 2.48 % pa in the previous month.
• Germany Long Term Interest Rate data is updated monthly, available from Jan 1990 to Feb 2025.
• The data reached an all-time high of 9.09 % pa in Oct 1990 and a record low of -0.65 % pa in Aug 2019.
• Long Term Interest Rate is reported by reported by CEIC Data.

• In the latest reports, Germany Short Term Interest Rate: Month End: EURIBOR: 3 Months was reported at -0.57 % pa in Nov 2021.
• The cash rate (Policy Rate: Month End: Main Refinancing Operations) was set at 2.90 % pa in Feb 2025.
• Germany Exchange Rate against USD averaged 0.92 (USD/EUR) in Jun 2023.

Canada CA: Long-Term Interest Rate: Government Bonds data was reported at 2.900 % in 2026. This records a decrease from the previous number of 3.018 % for 2025. Canada CA: Long-Term Interest Rate: Government Bonds data is updated yearly, averaging 5.541 % from Dec 1960 (Median) to 2026, with 67 observations. The data reached an all-time high of 14.989 % in 1981 and a record low of 0.753 % in 2020. Canada CA: Long-Term Interest Rate: Government Bonds data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Canada – Table CA.OECD.EO: Interest Rate: Forecast: OECD Member: Annual. IRL - Long-term interest rate on government bonds; Yield 10-year federal government benchmark bond)

The benchmark interest rate in China was last recorded at 3 percent. This dataset provides the latest reported value for - China Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

View yearly updates and historical trends for US Prime Rate Forecast. from United States. Source: Oregon Office of Economic Analysis. Track economic data …

Forecast: Bank Lending Interest Rate in Italy 2024 - 2028 Discover more data with ReportLinker!

Norway NO: Short-Term Interest Rate: Double Hit Scenario data was reported at 0.343 % in 2021. This records a decrease from the previous number of 0.672 % for 2020. Norway NO: Short-Term Interest Rate: Double Hit Scenario data is updated yearly, averaging 6.827 % from Dec 1970 (Median) to 2021, with 52 observations. The data reached an all-time high of 15.367 % in 1982 and a record low of 0.343 % in 2021. Norway NO: Short-Term Interest Rate: Double Hit Scenario data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Norway – Table NO.OECD.EO: Interest Rate: Forecast: OECD Member: Annual. IRS - Short-term interest rate Short-term interest:https://stats.oecd.org/glossary/detail.asp?ID=1394; 3-month NIBOR rate (euro-kroner interest rates based on monthly averages of quoted daily selling rates for five big banks)

Key information about Sweden Long Term Interest Rate

• Sweden Long Term Interest Rate: Month Avg: Sweden: ECB Harmonised was reported at 2.26 % pa in Feb 2025, compared with 2.32 % pa in the previous month.
• Sweden Long Term Interest Rate data is updated monthly, available from Jan 1987 to Feb 2025.
• The data reached an all-time high of 13.75 % pa in Mar 1990 and a record low of -0.36 % pa in Aug 2019.
• Long Term Interest Rate is reported by reported by CEIC Data.