United Kingdom

Roughly neutral

Policy rate

3.75%

Last move Dec 2025

Inflation

3.88%

As of null

Real policy rate

-0.13%

Policy rate less inflation

Debt to GDP

103.60%

2026 est.

Inflation target2%

Policy rate vs target+1.75 pp

Last move-25 bps cut

Months at current rate9

Real GDP growth0.80%

Next scheduled decisionNot published

Policy rate path, latest five years. Cycle peak 17.00% (Nov 1979).

The verdict

United Kingdom sets its policy rate at 3.75%, against inflation of 3.88% — a real rate of -0.13%, with the policy rate sitting below the inflation rate. The most recent decision was a 25bp cut in Dec 2025. The rate has held there for about 9 months. The bank targets 2% inflation, and prices are running above that at 3.88%; the policy rate stands 1.75 percentage points above target. On the fiscal side, the economy carries government debt of 103.6% of GDP (2026 est.) and real GDP growth of 0.8%.

Sources: policy rate and cycle history — BIS central bank policy rates (WS_CBPOL); inflation — national statistical agencies; debt and growth — IMF World Economic Outlook. Methodology: https://www.globalfinancialinfo.info/methodology/policy-rates · Dataset: https://www.globalfinancialinfo.info/global-economy · Free to print and share for non-commercial classroom use (CC BY-NC-ND 4.0).

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