Today the Monetary Policy Committee (MPC) increased the Bank Rate from 0.5% to 0.75%. The Bank Rate is the single most important interest rate in the UK. In the news, it’s sometimes called the ‘Bank of England base rate’ or even just ‘the interest rate’.
Bank Rate determines the interest rate we pay to commercial banks that hold money with us. It influences the rates those banks charge people to borrow money or pay on their savings.
The MPC sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 16 March 2022, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.25 percentage points, to 0.75%. One member preferred to maintain Bank Rate at 0.5%.