The benchmark interest rate in the United Kingdom was last recorded at 4 percent. This dataset provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

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.

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 Jul 2025 about long-term, 10-year, United Kingdom, bonds, yield, government, interest rate, interest, and rate.

Graph and download economic data for Daily Sterling Overnight Index Average (SONIA) Rate (IUDSOIA) from 1997-01-02 to 2025-09-08 about Sterling, sonia, overnight, average, interest rate, interest, rate, and indexes.

The yield on UK 5 Year Bond Yield rose to 4.08% on September 12, 2025, marking a 0.04 percentage point increase from the previous session. Over the past month, the yield has edged up by 0.07 points and is 0.46 points higher than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity. United Kingdom 5 Year Note Yield - values, historical data, forecasts and news - updated on September of 2025.

Interest rate on new mortgages in the United Kingdom decreased to 4.34 percent in June from 4.47 percent in May of 2025. This dataset includes a chart with historical data for the United Kingdom Interest Rate on New Mortgages.

The yield on United Kingdom 10Y Bond Yield rose to 4.68% on September 12, 2025, marking a 0.07 percentage point increase from the previous session. Over the past month, the yield has edged up by 0.08 points and is 0.91 points higher than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity. UK 10 Year Gilt Bond Yield - values, historical data, forecasts and news - updated on September of 2025.

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.

Historical dataset of the 12 month LIBOR rate back to 1986. The London Interbank Offered Rate is the average interest rate at which leading banks borrow funds from other banks in the London market. LIBOR is the most widely used global "benchmark" or reference rate for short term interest rates.

United Kingdom UK: Real Interest Rate data was reported at -1.195 % pa in 2014. This records an increase from the previous number of -1.378 % pa for 2013. United Kingdom UK: Real Interest Rate data is updated yearly, averaging 1.802 % pa from Dec 1967 (Median) to 2014, with 48 observations. The data reached an all-time high of 6.438 % pa in 1985 and a record low of -12.172 % pa in 1975. United Kingdom UK: Real 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. Real interest rate is the lending interest rate adjusted for inflation as measured by the GDP deflator. The terms and conditions attached to lending rates differ by country, however, limiting their comparability.; ; International Monetary Fund, International Financial Statistics and data files using World Bank data on the GDP deflator.; ;

Overnight Interbank Average Rate in the United Kingdom remained unchanged at 3.97 percent on Monday September 8. This dataset includes a chart with historical data for the United Kingdom Overnight Interbank Average Rate.

Index Time Series for Xtrackers II GBP Overnight Rate Swap UCITS ETF 1D. The frequency of the observation is daily. Moving average series are also typically included. NA

Index Time Series for Xtrackers II - USD Overnight Rate Swap UCITS ETF. The frequency of the observation is daily. Moving average series are also typically included. NA

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.

Graph and download economic data for 10-Year Real Interest Rate (REAINTRATREARAT10Y) from Jan 1982 to Sep 2025 about 10-year, interest rate, interest, real, rate, and USA.

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Mortgage rates surged at an unprecedented pace in 2022, with the average 10-year fixed rate doubling between March and December of that year. In response to mounting inflation, the Bank of England implemented a series of rate hikes, pushing borrowing costs steadily higher. By August 2025, the average 10-year fixed mortgage rate had climbed to 4.49 percent. As financing becomes more expensive, housing demand has cooled, weighing on market sentiment and slowing house price growth. How have the mortgage hikes affected the market? After surging in 2021, the number of residential properties sold fell significantly in 2023, dipping to just above *** million transactions. This contraction in activity also dampened mortgage lending. Between the first quarter of 2023 and the first quarter of 2024, the value of new mortgage loans declined year-on-year for five consecutive quarters. Even as rates eased modestly in 2024 and housing activity picked up slightly, volumes remained well below the highs recorded in 2021. How are higher mortgages impacting homebuyers? For homeowners, the impact is being felt most acutely as fixed-rate deals expire. Mortgage terms in the UK typically range from two to ten years, and many borrowers who locked in historically low rates are now facing significantly higher repayments when refinancing. By the end of 2026, an estimated five million homeowners will see their mortgage deals expire. Roughly two million of these loans are projected to experience a monthly payment increase of up to *** British pounds by 2026, putting additional pressure on household budgets and constraining affordability across the market.

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.

View monthly updates and historical trends for UK Long-Term Interest Rates. from United Kingdom. Source: Organisation for Economic Co-operation and Develo…

The yield on United Kingdom 2Y Bond Yield rose to 4.00% on September 12, 2025, marking a 0.06 percentage point increase from the previous session. Over the past month, the yield has edged up by 0.12 points and is 0.19 points higher than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity. This dataset includes a chart with historical data for UK 2Y.