Bank Rate increases to 3%

03 November 2022

In a move that marks the highest increase for 33 years, the Bank of England’s Monetary Policy Committee has increased the bank rate to 3%, an increase of 0.75%.

The committee voted on the proposed increase, seven voting in favour and two voting against it. However, the votes against would have preferred to see an increase of 0.25% of 0.5%, therefore, all were in favour of an increase in some way.

Payroll professionals must now keep an eye on HM Revenue and Customs’ (HMRC’s) late payment interest and repayment interest rates. These track the base rate as such:

  • late payment interest – set at base rate plus 2.5%
  • repayment interest – set at base rate minus 1%, with a lower limit of 0.5%.

The next review of the base rate is due on 15 December 2022.

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