UK interest rates: will the Bank of England cut the base rate?

UK interest rate-setters: who is on the MPC?

The Monetary Policy Committee has nine members, and between them they decide UK interest rates every six weeks.

They are:

• Andrew Bailey, governor of the Bank of England;
• Sarah Breeden, deputy governor, financial stability;
• Clare Lombardelli, deputy governor, monetary policy;
• Huw Pill, chief economist;
• Dave Ramsden, deputy governor, markets and banking;
• Four ‘external members’ that are appointed directly by the government: Swati Dhingra, Megan Greene, Catherine Mann and Alan Taylor.

In theory, this gives the MPC a well-rounded balance of expertise and perspectives.

Bank of England expected to hold UK interest rates at 3.75%

The consensus expectation ahead of tomorrow’s UK interest rate announcement is that the MPC will hold rates where they are, at 3.75%.

This is largely because of the potential fallout from the oil price rises that have occurred since conflict broke out in the Middle East. Oil prices rose to close to $110 per barrel earlier today.

“The global economic landscape has become increasingly complex in recent months, with geopolitical tensions impacting financial markets and consumer confidence,” said  Aaron Shinwell, chief lending officer at Nottingham Building Society. “While interest rates had been on a gradual downward trajectory, the ongoing situation in various regions has introduced a high degree of uncertainty.

"The expectation is that the Bank of England will maintain the current base rate of 3.75% this week,” Shinwell continued. “However, the path forward is far less clear beyond that.”

Will tomorrow’s interest rate decision finally unite the MPC?

Members of the MPC have been especially divided in recent meetings, with a much larger split appearing between the committee’s doves and hawks.

In four of the five most recent meetings, votes to cut or hold rates have been split 5-4, leaving Bank of England governor Andrew Bailey to cast the deciding vote.

A main source of division at these meetings was the UK inflation outlook, with doves making the case that disinflation was going in the right direction, justifying further interest rates cues.

Meanwhile, more hawkish members treated the inflation statistics with more caution, arguing that disinflation needed to make more progress before a cut could be made.

But with the UK potentially set to experience an economic shock due to conflict in the Middle East, a clearer consensus may emerge at the March meeting, with most economists expecting the MPC to hold rates where they are.

When did UK interest rates start falling?

Interest rates in the UK have been on a downward trajectory for some time now, with the Bank of England starting this most recent cutting cycle in August 2024.

Before rates started being cut, the base rate rose from 0.25% at the tail end of 2021 to 5.25% in summer 2023 as the Bank responded to soaring inflation in the wake of the 2022 energy crisis.

Since the summer of 2024, rates have been falling slowly and gradually, with the MPC’s watchwords for much of this time being “gradual and careful”.

A total of six rate cuts have been made since, bringing the base rate to 3.75% at the MPC’s December 2025 meeting.

At the following meeting in February 2026, the committee made an overt signal that it wanted to cut rates further as inflation was forecast to return to the 2% target quickly, saying: “On the basis of the current evidence, Bank Rate is likely to be reduced further.”

However, now war in Iran is threatening the UK economy, it seems hopes of a further reduction on Thursday are far-fetched.

When does the MPC meet to decide UK interest rates?

The MPC meets today – possibly as you’re reading this. But the results of its meeting are announced tomorrow.

The announcement will include details of what each of the nine members of the MPC felt about the next UK interest rate decision, as well as how each voted.

The announcement will be made at 12pm on Thursday 19 March – make sure you join us live as we announce the result.

UK interest rates to be decided

Good afternoon, and welcome to rolling coverage ahead of the latest UK interest rates decision from the Bank of England’s Monetary Policy Committee (MPC), which will be announced tomorrow.

There is plenty of uncertainty ahead of the announcement. Three weeks ago, most experts were predicting a cut, especially given how narrowly the committee voted to hold UK interest rates at 3.75% last time it met.

But the conflict in the Middle East has thrown these forecasts up in the air. Given the unpredictable impact of the war on inflation, many experts now believe the MPC will wait to see what happens and hold rates – while some even believe it could raise interest rates in order to stave off any resurgent inflation.

Whatever happens, we will bring you rolling views and analysis before the decision, breaking news as it happens, and reaction and analysis afterwards.