Katie Williams
The Bank of England meets eight times a year to set the base rate, a mechanism that influences interest rates on everything from mortgages to savings accounts.
The Bank’s next rate decision will be announced on 6 November. The Bank has been cutting interest rates since last summer at a rate of roughly once per quarter, but most analysts expect cuts to slow down going forward.
The last cut came on 7 August when the Monetary Policy Committee (MPC) reduced rates to 4% in a knife-edge decision, with two votes required before the 5-4 verdict was reached.Most forecasts expect the central bank to keep interest rates at 4% when the MPC meets next as inflation remains almost double the 2% target – although Goldman Sachs has now predicted a cut next week.
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Bank of England meeting dates
The MPC meets roughly every six weeks to set the base rate. The meetings usually happen the day before the interest rate announcement. There are two more meetings left this year:
- 6 November
- 18 December
What is the Bank of England’s Monetary Policy Committee?
What is the Bank of England’s Monetary Policy Committee?
The MPC is responsible for setting the base rate, also known as ‘Bank Rate’.
The base rate is the most important interest rate in the UK, as the interest you earn on your savings or that you repay on loans is influenced, set and adjusted based on this figure.
The committee is made up of nine members, chaired by governor Andrew Bailey. Four of the committee members are external experts, appointed to make sure the MPC benefits from thinking and expertise from outside of the Bank of England.
During each meeting, the committee votes on whether to cut, hold or raise interest rates.
Bank of England base rate forecast
While September’s inflation reading of 3.8% came in lower than the 4% expected, forecasters remain sceptical whether interest rates will be cut again before 2025 ends.
A poll of investors by Reuters found that most think the Bank of England will likely only make its next rate cut in February 2026, but some economists believe this is too austere a prediction.
Sanjay Raja, chief UK economist at Deutsche Bank, said “the odds of a Q4-25 rate cut have risen” on the back of September’s inflation data.
“Crucially, all of the Bank of England’s preferred core services measures slipped in September highlighting a more broad-based fall in price momentum,” he added.
“With two additional CPI prints to watch, and two further labour market reports to come before the December meeting, we think there will be enough ammunition for the MPC to ease rates further. And with chancellor Reeves laying the groundwork for lowering the cost of living in the upcoming Budget, we continue to think that a December rate cut is very much in play.”
Meanwhile, economists at Peel Hunt also believe a base rate cut is on the cards in December if inflation comes down and chancellor Rachel Reeves’ Autumn Budget does not introduce inflationary pressures into the economy.
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