06 February 2025
It was widely predicted that The Bank of England’s Monetary Policy Committee (MPC) would vote to reduce the bank base rate today and they did not disappoint.
Seven members of the MPC voted to reduce the interest rate by 0.25 percentage points, and two member voted to reduce the rate by 0.5 percentage points. There were no votes to increase or hold the rate this time.
Even though inflation is currently sitting just above the 2% target at 2.5%, the MPC is now also taking the weakening economic growth into consideration.
For payroll professionals, it is good to be aware of the impact this announcement has on HM Revenue and Customs’ (HMRC’s) late payment interest charges.
HMRC interest rates are set in legislation and are linked to the Bank of England base rate, these rates are:
- 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 Bank of England announcement is set for 20 March 2025.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.