Bank of England Base Rate Change

Catherine Alexander
Partner and Mortgage & Protection Adviser at GDA

On the 8th of May 2025 the Bank of England's Monetary Policy Committee announced a 0.25% decrease to the base rate. The Bank of England Base Rate now stands at 4.25%.

As a result of this announcement, if you are a mortgage customer with a mortgage which tracks the Bank of England Base Rate, you will see your account interest rate change (subject to any product rate cap or collar) in line with your terms and conditions.

Bank of England. Official Bank Rate History. https://www.bankofengland.co.uk/.

In their report the MPC have said that they have been able to cut interest rates again as inflation has been close to the 2% target since the middle of last year, from a peak of over 11% in 2022. They are expecting a temporary increase in inflation this year to 3.7%, partly because of higher energy prices. Inflation is expected to fall back to the 2% target after that.

There is also a lot of uncertainty from global developments, partly because of changes in global trade policies. They are assessing what this could mean for UK inflation closely. They need to be confident that inflation will remain low and stable in a lasting way before deciding how much further and how fast they can cut interest rates.

You can read the full report of the latest meeting at: https://www.bankofengland.co.uk/monetary-policy-report/2025/may-2025.

References: https://www.bankofengland.co.uk.

This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.