August 2024 marked a significant shift in the UK's monetary policy, as it saw the first reduction in the official bank base interest rate since August 2023. This change came after a period of consistent rate hikes that began in late 2021. In a bid to minimize the economic effects of the COVID-19 pandemic, the Bank of England cut the official bank base rate in March 2020 to a record low of *** percent. This historic low came just one week after the Bank of England cut rates from **** percent to **** percent in a bid to prevent mass job cuts in the United Kingdom. It remained at *** percent until December 2021 and was increased to one percent in May 2022 and to **** percent in October 2022. After that, the bank rate increased almost on a monthly basis, reaching **** percent in August 2023. It wasn't until August 2024 that the first rate decrease since the previous year occurred, signaling a potential shift in monetary policy. Why do central banks adjust interest rates? Central banks, including the Bank of England, adjust interest rates to manage economic stability and control inflation. Their strategies involve a delicate balance between two main approaches. When central banks raise interest rates, their goal is to cool down an overheated economy. Higher rates curb excessive spending and borrowing, which helps to prevent runaway inflation. This approach is typically used when the economy is growing too quickly or when inflation is rising above desired levels. Conversely, when central banks lower interest rates, they aim to encourage borrowing and investment. This strategy is employed to stimulate economic growth during periods of slowdown or recession. Lower rates make it cheaper for businesses and individuals to borrow money, which can lead to increased spending and investment. This dual approach allows central banks to maintain a balance between promoting growth and controlling inflation, ensuring long-term economic stability. Additionally, adjusting interest rates can influence currency values, impacting international trade and investment flows, further underscoring their critical role in a nation's economic health. Recent interest rate trends Between 2021 and 2024, most advanced and emerging economies experienced a period of regular interest rate hikes. This trend was driven by several factors, including persistent supply chain disruptions, high energy prices, and robust demand pressures. These elements combined to create significant inflationary trends, prompting central banks to raise rates in an effort to temper spending and borrowing. However, in 2024, a shift began to occur in global monetary policy. The European Central Bank (ECB) was among the first major central banks to reverse this trend by cutting interest rates. This move signaled a change in approach aimed at addressing growing economic slowdowns and supporting growth.

Mortgage rates increased at a record pace in 2022, with the 10-year fixed mortgage rate doubling between March 2022 and December 2022. With inflation increasing, the Bank of England introduced several bank rate hikes, resulting in higher mortgage rates. In May 2025, the average 10-year fixed rate interest rate reached **** percent. As borrowing costs get higher, demand for housing is expected to decrease, leading to declining market sentiment and slower house price growth. How have the mortgage hikes affected the market? After surging in 2021, the number of residential properties sold declined in 2023, reaching just above *** million. Despite the number of transactions falling, this figure was higher than the period before the COVID-19 pandemic. The falling transaction volume also impacted mortgage borrowing. Between the first quarter of 2023 and the first quarter of 2024, the value of new mortgage loans fell year-on-year for five straight quarters in a row. How are higher mortgages affecting homebuyers? Homeowners with a mortgage loan usually lock in a fixed rate deal for two to ten years, meaning that after this period runs out, they need to renegotiate the terms of the loan. Many of the mortgages outstanding were taken out during the period of record-low mortgage rates and have since faced notable increases in their monthly repayment. About **** million homeowners are projected to see their deal expire by the end of 2026. About *** million of these loans are projected to experience a monthly payment increase of up to *** British pounds by 2026.

Cancer diagnoses and age-standardised incidence rates for all types of cancer by age and sex including breast, prostate, lung and colorectal cancer.

Key information about United Kingdom Policy Rate

• United Kingdom cash rate (Policy Rate: Month End: Base Rate) was set at 4.50 % pa in Feb 2025, compared with 4.75 % pa in the previous Jan 2025.
• UK Policy Rate averaged 5.75 % pa and is updated monthly, available from Jun 1972 to Feb 2025.
• The data reached an all-time high of 17.00 % pa in Jun 1980 and a record low of 0.10 % pa in Nov 2021.

• In the latest reports, UK Short Term Interest Rate: Month End: ICE LIBOR: 3 Months was reported at 0.09 % pa in Apr 2021.
• Its Long Term Interest Rate (Long Term Interest Rate: Month Avg: United Kingdom: ECB Harmonised ) was reported at 4.67 % pa in Jan 2025.
• UK Exchange Rate against USD averaged 0.79 (USD/GBP) in Jun 2023.
• Its Real Effective Exchange Rate was 87.74 in Jan 2025.

United Kingdom UK: Lending Interest Rate data was reported at 0.500 % pa in 2014. This stayed constant from the previous number of 0.500 % pa for 2013. United Kingdom UK: Lending Interest Rate data is updated yearly, averaging 6.963 % pa from Dec 1967 (Median) to 2014, with 48 observations. The data reached an all-time high of 16.313 % pa in 1980 and a record low of 0.500 % pa in 2014. United Kingdom UK: Lending Interest Rate data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United Kingdom – Table UK.World Bank.WDI: Interest Rates. Lending rate is the bank rate that usually meets the short- and medium-term financing needs of the private sector. This rate is normally differentiated according to creditworthiness of borrowers and objectives of financing. The terms and conditions attached to these rates differ by country, however, limiting their comparability.; ; International Monetary Fund, International Financial Statistics and data files.; ;

Graph and download economic data for Bank of England Policy Rate in the United Kingdom (BOERUKM) from Nov 1694 to Jan 2017 about academic data, United Kingdom, and rate.

Between January 2018 and May 2025, the United Kingdom's consumer price inflation rate showed notable volatility. The rate hit its lowest point at *** percent in August 2020 and peaked at *** percent in October 2022. By September 2024, inflation had moderated to *** percent, but the following months saw inflation increase again. The Bank of England's interest rate policy closely tracked these inflationary trends. Rates remained low at -* percent until April 2020, when they were reduced to *** percent in response to economic challenges. A series of rate increases followed, reaching a peak of **** percent from August 2023 to July 2024. The central bank then initiated rate cuts in August and November 2024, lowering the rate to **** percent, signaling a potential shift in monetary policy. In February 2025, the Bank of England implemented another rate cut, setting the bank rate at *** percent, which was further reduced to **** percent in May 2025. Global context of inflation and interest rates The UK's experience reflects a broader international trend of rising inflation and subsequent central bank responses. From January 2022 to July 2024, advanced and emerging economies alike increased their policy rates to counter inflationary pressures. However, a shift began in late 2024, with many countries, including the UK, starting to lower rates. This change suggests a potential new phase in the global economic cycle and monetary policy approach. Comparison with other major economies The UK's monetary policy decisions align closely with those of other major economies. The United States, for instance, saw its federal funds rate peak at **** percent in August 2023, mirroring the UK's rate trajectory. Similarly, central bank rates in the EU all increased drastically between 2022 and 2024. These synchronized movements reflect the global nature of inflationary pressures and the coordinated efforts of central banks to maintain economic stability. As with the UK, both the U.S. and EU began considering rate cuts in late 2024, signaling a potential shift in the global economic landscape.

Dataset of UK mortgage products with 10-year fixed terms, including initial rates, APRC, fees, and LTV percentages.

Key information about United Kingdom Short Term Interest Rate

• United Kingdom Short Term Interest Rate: Month End: ICE LIBOR: 3 Months was reported at 0.09 % pa in Apr 2021, compared with 0.09 % pa in the previous month.
• UK Short Term Interest Rate data is updated monthly, available from Jan 1986 to Apr 2021.
• The data reached an all-time high of 15.38 % pa in Apr 1990 and a record low of 0.03 % pa in Dec 2020.
• Short Term Interest Rate is reported by reported by ICE Benchmark Administration.

• In the latest reports, UK Long Term Interest Rate: Month Avg: United Kingdom: ECB Harmonised was reported at 3.95 % pa in May 2023.
• The cash rate (Policy Rate: Month End: Base Rate) was set at 4.50 % pa in May 2023.
• UK Exchange Rate against USD averaged 0.80 (USD/GBP) in May 2023.

Graph and download economic data for U.S. / U.K. Foreign Exchange Rate in the United Kingdom (USUKFXUKM) from Jan 1791 to Jan 2017 about academic data, United Kingdom, exchange rate, and rate.

The effective fixed interest rate of new consumer credit in the United Kingdom (UK) reached over nine percent in December 2024. During the first half of 2020, the interest rates for all new household lending declined sharply. However, since July 2020, interest rates for secured and unsecured loans have soared. In the first quarter of 2024, the average interest rates of personal loans in the UK remained relatively stable.

Measures of monthly UK inflation data including CPIH, CPI and RPI. These tables complement the consumer price inflation time series dataset.

Dataset of UK mortgage products with 5-year fixed terms, including initial rates, APRC, fees, and LTV percentages.

Graph and download economic data for Interest Rates: Long-Term Government Bond Yields: 10-Year: Main (Including Benchmark) for United Kingdom (IRLTLT01GBM156N) from Jan 1960 to May 2025 about long-term, 10-year, United Kingdom, bonds, yield, government, interest rate, interest, and rate.

Mortgage interest rates in the UK were on a downward trend for more than a decade before soaring in 2022. In the fourth quarter of 2024, the average weighted interest rate stood at **** percent — nearly ***** times the interest rate in the fourth quarter of 2021. Mortgage rates also vary depending on the type of mortgage: Historically, fixed rate mortgages with a shorter term had on average lower interest rates. What types of mortgages are there? In terms of the type of interest rate, mortgages can be fixed and variable. A fixed interest rate is simply a mortgage where the rate of repayment is fixed, while a variable rate depends on the lender’s underlying variable interest rate. Furthermore, mortgages could be for a house purchase or for refinancing. The vast majority of mortgages in the UK are fixed rate mortgages for house purchase, and only a small share is for remortgaging. How big is the UK mortgage market? The UK has the largest mortgage market in Europe, amounting to nearly ***billion euros in gross residential mortgage lending as of the second quarter of 2023. When comparing the total outstanding residential mortgage lending, the UK also ranks first with about *** trillion euros.

Unemployment Rate in the United Kingdom increased to 4.60 percent in April from 4.50 percent in March of 2025. This dataset provides the latest reported value for - United Kingdom Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

United Kingdom UK: Money Market Rate data was reported at 0.299 % pa in 2016. This records a decrease from the previous number of 0.392 % pa for 2015. United Kingdom UK: Money Market Rate data is updated yearly, averaging 5.373 % pa from Dec 1969 (Median) to 2016, with 48 observations. The data reached an all-time high of 15.377 % pa in 1980 and a record low of 0.299 % pa in 2016. United Kingdom UK: Money Market Rate data remains active status in CEIC and is reported by International Monetary Fund. The data is categorized under Global Database’s United Kingdom – Table UK.IMF.IFS: Money Market and Policy Rates: Annual.