Bank Rate history: past changes, record lows and recent rises

Bank Rate, the interest rate set by the Bank of England, stands at 3.75%¹. It has been left unchanged at that level for six meetings in a row: at its most recent decision, in September 2026, the Monetary Policy Committee voted 6-3 in favour of holding the rate, with the minority preferring a different course². The rate has sat at 3.75% since December 2025³. The next decision is due on Thursday 5 November 2026¹.

The story of Bank Rate over the past two decades is one of extremes. After the 2008 financial crisis it was pushed down to a record low of 0.1%, where it stayed through the pandemic years. Then, between December 2021 and August 2023, the Bank raised it 14 times in a row, taking it from 0.1% to a peak of 5.25%⁴. Since then it has been cut back, in stages, to today's 3.75%.

This page sets out that history: what Bank Rate is, who decides it and how often, how low and how high it has gone, why it rose so fast after 2021, and what each change means for mortgages, savings and other borrowing.

Bank Rate today: 3.75%, held six meetings in a row

Bank Rate has been at 3.75% since December 2025³, and the Bank of England has held it there through every meeting since. The September 2026 decision was the sixth consecutive hold², with the Committee splitting 6-3, its third divided vote in a row on the question of what to do next².

The run of holds follows a period of steady cuts. Scottish Government analysis of the housing market noted that the Committee kept Bank Rate unchanged at 3.75% at its last four meetings as of mid-2026⁵, and the Bank itself confirmed the level and the date of the next announcement, Thursday 5 November 2026¹. The holds have come even as inflation has picked up again: the Bank is projecting inflation to peak at 3.2% in the final quarter of 2026⁶, well above its 2% target, and one analysis of the March 2026 decision noted the Committee was then estimating inflation of around 3% for the second quarter, possibly reaching 3.5% in the third⁷.

That tension, between an inflation rate above target and a Bank Rate being left alone, is the current chapter of the story. Earlier in 2026, commentators reported that the Bank had indicated it would continue to slowly reduce the base rate during 2026, with the possibility of it stabilising by the end of the year⁸. Whether the holds continue depends on the inflation numbers published each month, which are explained in latest UK inflation figures.

What Bank Rate is and who sets it

Bank Rate is the single most important interest rate in the UK. The Bank of England describes it as "the core interest rate in the UK and it is our job to set it"⁹. In practical terms, it is the rate of interest the Bank pays to commercial banks, building societies and other financial institutions that hold money with it⁹. Because that rate shapes what it costs banks to fund themselves, it feeds through into the rates they charge for mortgages and loans and pay on savings. The Bank puts it simply: this is the rate it pays to high street banks that hold money with it, and it therefore influences their own lending and saving rates¹⁰.

The rate has a precise legal definition too. Legislation defines the Bank of England base rate as "the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short-term liquidity in the money markets"¹¹. That definition matters whenever a contract, a court award or a financial product refers to "the base rate": it means this announced rate, not any individual bank's own rate.

Decisions are made by the Monetary Policy Committee, a body that meets on a fixed schedule and votes on the level of Bank Rate. The Committee's job is set by the Government: a target of keeping inflation at 2%, measured by the Consumer Price Index¹². The Committee is covered in more detail in the Monetary Policy Committee: who sets UK interest rates and when it meets.

How often Bank Rate changes and how decisions are made

The Bank of England makes its decision on interest rates every six weeks or so¹, which works out at eight scheduled decisions a year¹³. Each decision follows a meeting of the Monetary Policy Committee, at which members look at the inflation outlook, the economy and financial conditions, and vote. The outcome, with the split of the vote, is published alongside the Monetary Policy Summary and Minutes.

The size of each move is usually small. The Bank notes that central banks generally change their rates by 0.25%, though it can alter Bank Rate by as little or as much as it needs to¹². In practice, most of the changes of the past decade have been 0.25 percentage point steps, in either direction: the November 2017 rise, the first in a decade, was 0.25 percentage point¹⁴, and the cuts of 2024 and 2025 were each of 0.25 percentage points³.

The Committee does not have to wait for a scheduled meeting. It has the power to change the rate at any time, and it used that power in March 2020, when it reduced the base rate in response to the potential effects of the coronavirus on the economy¹³. That emergency cut is the clearest recent example of the schedule being set aside.

Not every meeting produces a change. The current sequence of six holds in a row² follows an earlier period in 2025 when the rate was also left unchanged at several meetings, with the Committee at one point having a further six meetings scheduled in that year¹⁵. A hold is itself a decision: it signals the Committee thinks the current rate is the right one for the inflation outlook in front of it. How the Committee weighs that outlook is explained in the 2% inflation target and why higher interest brings prices down.

The record low after the financial crisis and the pandemic

The lowest Bank Rate has ever been is 0.1%. It fell to that level in two steps: first after the 2008 financial crisis, when the Bank cut rates sharply and began using quantitative easing to stimulate the economy, a tool it has used since the 2008 financial crisis¹², and then again in March 2020, when the pandemic cut of that year took it to the floor¹³. It stayed at 0.1% until the end of 2021¹⁶.

For context on how unusual that was: in the years between 1975 and 2007, Bank Rate was 3.5% at its lowest point and 17% at its highest¹. Before the financial crisis, in 2007, the rate stood at 5.75%¹⁴. A rate of 0.1% was, in historical terms, close to zero, and it reshaped the financial world around it. Savers earned almost nothing on deposit accounts, while borrowers on trackers and variable mortgages paid very little.

The low-rate era lasted so long that it changed expectations about what "normal" meant. Before the crisis, the trend level of interest rates was thought to be around 4.5%, and by 2015 the then Governor, Mark Carney, was suggesting that the new "normal" might only be half as high¹⁷. That forecast proved too optimistic in the other direction: rates stayed well below even that reduced level for years, and the Resolution Foundation warned at the time about the need to make the most of the window of opportunity provided by low interest rates¹⁷.

The exit from the record low began in December 2021. The Bank of England interest rate rose from 0.1% in December 2021 to 5.25% in August 2023⁴, a change of direction described in more detail in the next section. The years in between, with rates at or near zero, are the reason so many households took out mortgages and other borrowing on the assumption that cheap money was permanent.

14 rises in a row: how Bank Rate climbed to 5.25%

Between the end of 2021 and August 2023, the Bank of England raised interest rates 14 consecutive times¹⁸, taking Bank Rate from 0.1% at the end of 2021 to 5.25% in August 2023¹⁶. The Joseph Rowntree Foundation described it as 14 consecutive increases across just 20 months¹⁶, an unprecedented pace for the modern era. By July 2022, partway through the sequence, the rate had already risen from 0.1% to 1.25%¹⁹.

The count of rises differs slightly between official sources depending on the period they measure. The Office for National Statistics, looking at the period from January 2022 to August 2023, describes the Bank as increasing the bank rate 13 times, from 0.25% to 5.25%²⁰. The House of Commons Library traces the full climb from 0.1% in December 2021 to 5.25% in August 2023⁴. The difference is the first rise, in December 2021, which falls outside the ONS window. Both accounts agree on the destination: a peak of 5.25% in August 2023¹⁸.

The driver was inflation. The Bank raised the base rate eight times in 2022 alone²¹, responding to double-digit inflation, the first time inflation had reached those levels since 1982²². The Bank's own explanation is direct: raising interest rates is the tool it has to bring inflation down and keep it low, against the Government's target of keeping inflation at 2%²³. The rate rises fed directly into household costs: the base rate increased from 0.75% to 4.25% during the tax year 2022 to 2023²⁴, and by December 2023 the Bank confirmed in its Financial Stability Report that Bank Rate stood at 5.25%²⁵.

In September 2023 the sequence stopped. After 14 consecutive rises, the Bank froze the rate at 5.25%²⁶, and it stayed there into 2024²⁷. The peak had been forecast to be lower: as late as mid-2023, market expectations suggested Bank Rate would peak at nearly 5% in November that year²², and the Resolution Foundation later noted that Bank Rate was expected to fall by just 1.25 percentage points in the three years after its peak, to reach around 3.5%²². In the event it peaked higher, at 5.25%, and fell further, to below that level. The inflation that drove all of this is covered in the cost of living crisis: what happened to prices from 2021.

The cuts that brought Bank Rate down to 3.75%

The first cut came in August 2024, taking Bank Rate from 5.25% to 5%²⁷. What happened next is reported differently in different documents, and the disagreement is worth stating plainly.

Scottish Government publications describe the Bank as reducing interest rates twice in 2024, in August and November, from 5.25% to 4.75%¹⁸. Which?, by contrast, reports that the base rate was cut four times in 2024, each by 0.25 percentage points, in February, May, August and December³. The two accounts cannot both be right about 2024, and the conflict has not been resolved. What is not in dispute is where the rate stood at the start of 2025: Financial Ombudsman Service guidance, using the Bank of England base rate in a worked example, shows Bank Rate at 4.75% from 15 January to 5 February 2025²⁸.

The 2025 cuts are clearer. The Ombudsman's worked examples show the rate at 4.50% from 6 February to 7 May 2025, and at 4.25% from 8 May to 6 August 2025²⁸. Scottish Government analysis published in September 2025 recorded that the Committee had lowered rates three times that year, from 4.75% to 4%²⁹. Which? then reported a fourth cut in December 2025, completing four cuts in 2025 in February, May, August and December⁸, and it is that December cut which brought the rate to 3.75%, the level it has held at ever since³.

The pattern since has been one of waiting. The rate was held at 4.5% for a stretch of meetings earlier in 2025, with the next announcement at the time due on 8 May¹⁵, and it has now been held at 3.75% for six meetings². Commentators reported in early 2026 that the Bank had indicated it would continue to slowly reduce the base rate during 2026, with it possibly stabilising by the end of the year⁸, and the Office for Budget Responsibility has forecast that the base rate will stabilise in 2026³⁰. Those are forecasts, not decisions: the only date that matters for the next change is the next announcement, on 5 November 2026¹.

How Bank Rate changes affect mortgages and savings

A change in Bank Rate reaches households through two main channels: what they pay to borrow and what they earn on savings. Neither is instant, and neither is one-for-one.

For borrowers on variable rates, a tracker mortgage follows the base rate up and down, and a lender's standard variable rate usually moves in the same direction, though by an amount the lender chooses. The Bank of England notes that Bank Rate influences the rates high street banks set, rather than dictating them¹⁰. For savers, the base rate influences the rates banks pay individuals on their savings²⁴, and the period after 2021 showed how sharply that can move: savings rates that had been close to nothing for a decade rose steadily as Bank Rate climbed.

The delay is the important part. The Bank of England states that a change in interest rates usually takes up to two years to work through the economy²³. That is because most borrowing is on fixed terms: a fixed rate mortgage only reprices when the deal ends, and savings held in fixed rate bonds only move when they mature. During the rising period, this worked in borrowers' favour for a while and then against them, as deals taken in the low-rate years expired and were replaced at much higher rates. The Bank has also created rules to limit the riskiest type of mortgage lending¹⁰, a response to the strain that fast rate rises placed on household budgets.

What this means in practice is set out in two companion pages: how a Bank Rate change affects your mortgage payments and average savings interest: what savers typically earn over time. The wider effect on the cost of borrowing is in typical interest on credit cards, overdrafts and personal loans.

Where Bank Rate does not change what you pay

Bank Rate does not set every rate you pay, and for many households it sets none of them for years at a time.

• Fixed rate mortgages are not affected by any change in the Bank of England base rate during the fixed rate period³¹. A two-year or five-year fix taken today holds its rate whatever the Committee decides, until the deal ends.
• Part fixed, part variable mortgages behave as you would expect from the two halves: the fixed rate part is unaffected by any change in the base rate during the fixed period, while the variable part moves³¹.
• Fixed rate savings work the same way in reverse: a bond locked in at a rate keeps paying it to maturity, which protected savers when rates fell and held them back when rates rose.
• Existing fixed loans and most credit card balances do not track the base rate directly, though the general level of rates influences what lenders charge new customers.

The practical consequence is that a Bank Rate change is often a slow-moving event for an individual household. Someone three years into a five-year fix feels nothing at the moment of a rise or a cut, and everything at the moment of remortgaging. That is why the timing of a fix ending matters as much as the level of Bank Rate itself, a point covered in gilt yields and swap costs: why fixed mortgage deals change between Bank Rate decisions.

It also cuts the other way. When the base rate was frozen at its current level during the rising period, savers with maturing fixed bonds faced reinvesting at rates that had already moved on³². A hold in Bank Rate does not mean the rates on offer to you are frozen too: lenders and savings providers reprice continuously in response to market expectations, not just to the announced rate.

Bank of England scams: what it will never ask you to do

Because the Bank of England is a well-known public institution, its name is used in scams. The Bank publishes a clear list of what it will never do, and knowing the list is the simplest protection.

The Bank of England states that it will never:

• contact you from personal email addresses³³
• ask you to move money "for safety" or to "release funds"³³
• offer savings accounts, investments, cryptoassets or "guaranteed returns"³³
• provide investment advice or endorsements³³
• contact you about unclaimed estates, refunds, fines or warrants³³
• verify your identity by requesting National Insurance numbers or bank statements, unless you are exchanging banknotes with the Bank³³

The Bank also states plainly that it and its staff do not endorse, promote or advertise financial products³³. Any message claiming the Bank of England is offering an investment, holding unclaimed money for you, or needs you to move funds to a safe account is a scam. The Bank is the UK's central bank and a publicly owned body³⁴; it does not hold personal current accounts and does not deal with members of the public about their money in this way.

If you receive such a message, do not reply, do not click links, and do not move money. Report it to your bank immediately and to the relevant authorities. The general rules on recognising and reporting scams are covered in scams and fraud: a complete guide, and your rights when a payment goes wrong are in consumer protection in UK financial services.