Bank Rate is the interest the Bank of England pays on reserves held by commercial banks. It is the BoE's main policy lever and feeds through to borrowing and savings rates across the UK.

Why is the MPC vote split important?

Because decisions are by majority, the distribution of votes signals how close the committee is to changing course — often moving sterling even when the rate is unchanged.

How does the BoE affect the pound?

Hawkish decisions or guidance relative to the Fed and ECB tend to support sterling; dovish surprises tend to weaken it.

Bank of England

BoE · United Kingdom · GBP

The Bank of England sets UK monetary policy and Bank Rate, the primary driver of the British pound.

The Bank of England (BoE) is the UK's central bank, responsible for monetary and financial stability. Its main policy instrument is Bank Rate, the rate it pays on commercial bank reserves, which transmits into mortgage, savings, and lending rates across the economy.

The pound is sensitive to the BoE's balance between stubborn services inflation and a growth outlook that has at times been fragile. The Bank also runs an active gilt portfolio, and decisions on quantitative tightening — the pace at which it reduces holdings — can affect gilt yields and sterling.

Policy rate

Bank Rate

Meeting cadence

The Monetary Policy Committee (MPC) meets eight times a year. Decisions are published with a vote split and, four times a year, a Monetary Policy Report.

Decision-making

The nine-member Monetary Policy Committee comprises the Governor, deputy governors, the Bank's chief economist, and external members. Decisions are by majority vote, and the vote split is published.

Currency

GBP

Mandate

Maintain price stability — a 2% CPI inflation target set by the government
Subject to that, support the government's economic objectives, including growth and employment

How it moves GBP

Bank Rate decisions and the published MPC vote split drive the pound.
The balance between services inflation and growth shapes the expected path.
Quantitative tightening pace affects gilt yields and sterling.
BoE–Fed and BoE–ECB divergence drives GBP/USD and EUR/GBP respectively.

What to watch

MPC vote split
A hawkish or dovish shift in the 9-member vote is a strong directional signal.
Monetary Policy Report
Quarterly forecasts for inflation and growth.
UK services CPI & wage growth
The persistence indicators the MPC weighs most heavily.
QT decisions
The annual pace of gilt-holdings reduction.

BoE FAQ

What is Bank Rate?: Bank Rate is the interest the Bank of England pays on reserves held by commercial banks. It is the BoE's main policy lever and feeds through to borrowing and savings rates across the UK.
Why is the MPC vote split important?: Because decisions are by majority, the distribution of votes signals how close the committee is to changing course — often moving sterling even when the rate is unchanged.
How does the BoE affect the pound?: Hawkish decisions or guidance relative to the Fed and ECB tend to support sterling; dovish surprises tend to weaken it.

Related currency pairs

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