The Bank of England has published its monthly statistics on effective interest rates for May 2026, showing the actual rates paid by households and businesses on their borrowing and received on their savings.
The data for May 2026 show that the effective rate on new mortgages was approximately 5.3 percent, down slightly from the peak but still significantly above the levels that prevailed before the Bank began raising interest rates. The effective rate on new personal loans was approximately 8.1 percent, and the rate on new credit cards was approximately 22.4 percent. On the savings side, the effective rate on new time deposits was approximately 4.2 percent, and the rate on instant-access savings accounts was approximately 2.1 percent.
The statistics provide a more accurate picture of the cost of borrowing and the return on saving than the Bank Rate alone, because they reflect the margins that banks add to their cost of funding and the competitive dynamics of the markets for different products. The Bank uses the data to assess the transmission of monetary policy — the extent to which changes in Bank Rate are being passed through to the rates that matter for households and businesses.
The data for May 2026 suggest that the transmission of monetary policy is working broadly as expected, with higher Bank Rate leading to higher borrowing costs and, to a lesser extent, higher savings rates. The Bank said it would continue to monitor the data as part of its assessment of the effectiveness of monetary policy.
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