Bank Rate
The Bank of England's main policy interest rate, set by the Monetary Policy Committee.
The Monetary Policy Committee kept Bank Rate at 3.75% on 16 September 2026, with three of its nine members voting for 4%; the next decision is due on 5 November.
Last refreshed: 7 October 2026
Timeline for Bank Rate
Expected path explains two-thirds of the 10-year yield rise
Is Britain Actually Broke?: Mentioned in: 30-year gilt passes 6%, last seen 1998Held at 3.75% on 16 September by six votes to three
Is Britain Actually Broke?: Mentioned in: MPC holds 3.75% and maps 2034 gilt exitMentioned in: Landlords borrow more while their cover falls again
Is Britain Actually Broke?Mentioned in: Bank holds rate as 30% report strain
Is Britain Actually Broke?Background
Bank Rate is the Bank of England's core interest rate: the rate it pays to banks, building societies and other institutions that hold money with it, and the rate it charges on its loans to them. The Monetary Policy Committee sets it at eight meetings a year to return inflation to the 2% target.
At its meeting ending on 16 September 2026 the committee kept Bank Rate at 3.75%: six members voted to hold, and three voted for 4%. The next decision is due on 5 November 2026.
Expected Bank Rate feeds into government borrowing costs. The National Institute of Economic and Social Research said on 1 October that about two-thirds of the rise in the 10-year gilt yield in the third quarter reflected expected Bank Rate.
Three members voted for a rise
The committee held Bank Rate at 3.75% at the meeting ending on 16 September 2026, after also holding it in July. The vote split six to three, and all three dissenters wanted to raise it to 4%.
Between the July and September meetings Brent Crude rose 36% and wholesale gas 78%. The committee expected inflation slightly above 4% early in 2027, against the 2% target that Bank Rate is set to meet. The same meeting set a PATH to run the Bank's gilt holdings down to zero by September 2034. The next rate decision is due on 5 November 2026.
Expected rates drive gilt yields higher
The PATH markets expect for Bank Rate did most of the work in lifting government borrowing costs in the third quarter of 2026. The National Institute of Economic and Social Research said on 1 October that about two-thirds of the 10-year gilt yield's rise reflected expected Bank Rate. The remaining third came from a larger term premium, now 0.83 percentage points.
By 6 October the 10-year yield had closed at 5.38%. On the institute's split, much of the rise would unwind if inflation figures softened, with no change in fiscal policy.