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Interest rates are one of the most important economic indicators, and they have a significant impact on businesses, consumers, and the overall economy. In the UK, interest rates are set by the Bank of England’s Monetary Policy Committee (MPC). The MPC meets eight times a year to set interest rates, and its decisions are based on a variety of economic factors, including inflation, unemployment, and economic growth.
As of September 2025, the Bank of England’s base rate is 2.25%. This is the lowest level since 2009, when the base rate was cut to 0.5% in response to the financial crisis. The MPC has raised interest rates five times since December 2025 in an effort to combat rising inflation.
Economists are divided on where interest rates will be in 2025. Some economists believe that the MPC will continue to raise interest rates in order to combat inflation. Others believe that the MPC will start to cut interest rates in 2025 or 2025 as the economy slows down.
The Bank of England’s latest Monetary Policy Report, published in August 2025, forecasts that the base rate will reach 3% by the end of 2025 and 3.5% by the end of 2025. The MPC also forecasts that inflation will remain above 2% for most of the forecast period.
Interest rates are one of the most important economic indicators, and they have a significant impact on businesses, consumers, and the overall economy. The Bank of England’s MPC is responsible for setting interest rates, and its decisions are based on a variety of economic factors, including inflation, unemployment, and economic growth. Economists are divided on where interest rates will be in 2025, but the Bank of England’s latest Monetary Policy Report forecasts that the base rate will reach 3% by the end of 2025 and 3.5% by the end of 2025.
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