What is Bank Rate?

The interest rate is the amount that a lender charges to a borrower for an asset loan, usually expressed as a percentage of the amount borrowed.

That percentage usually refers to the amount being paid each year (known as an annual percentage rate, or APR) but can be used to express payments on a more or less regular basis.

We use Bank rates in our dealings with other financial institutions, which influence many different interest rates in the economy. This includes the various lending and savings rates offered by high street banks and building societies.


For example, in 2020 Bank Rate was cut to 0.1% during the Covid-19 (coronavirus) crisis. This reduced the rates at which high street banks could borrow money from the Bank of England, which in turn meant they could lend to their customers at lower rates. Banks lowered the interest rates on some loans, such as mortgages, and offered lower interest rates on some savings accounts.

Why are there so many different interest rates?

The number of different interest rates available when you borrow or save can be confusing.

The interest rates high street banks set depend on more than just Bank rates.

For loans, other factors are considered, including the risk of the loan not being paid back. The greater the bank thinks that risk is, the higher the rate the bank will charge. It can also depend on how long you want to take out a loan or mortgage.

You can use our interactive chart to see how interest rates of different financial products have changed over time. Choose a product from the drop-down menu in the ‘enter the series’ box.