Background: Bank Rate, the Bank of England's core interest rate, and the committee that sets it

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Background: Bank Rate, the Bank of England's core interest rate, and the committee that sets it

Background

Bank Rate is in the news because the Bank of England's Monetary Policy Committee has just decided to hold it at 3.75 per cent. Bank Rate is the core interest rate in the United Kingdom. The Bank of England pays it on money that commercial banks and other financial institutions keep with it, and charges it on loans it makes to them. Because of that, banks move their own savings and lending rates when Bank Rate changes. The Monetary Policy Committee, not the Government, decides the level. The Committee meets eight times a year. It works to an inflation target of 2 per cent and uses Bank Rate as its main tool for meeting that target.

Rate-setting body: Monetary Policy Committee Meetings a year: 8 Inflation target: 2 per cent Bank Rate: 3.75 per cent

Why it matters for exams: Bank Rate is the Bank of England's core interest rate, set by the Monetary Policy Committee, which meets eight times a year and works to a 2 per cent inflation target.

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17 September 2026 Source: Bank of England

In plain words

Bank Rate Bank Rate — The core interest rate in the United Kingdom, paid on deposits held at the Bank of England and charged on its loans.

MPC Monetary Policy Committee — The Bank of England committee that decides Bank Rate.