UK overnight index swap rate: 1 year
UK overnight index swap rate: 1 year stood at 4.1% in Aug 2026, according to Bank of England — statistical and research datasets. It is one of the indicators in the Yield curves table (Value · Monthly), with a complete series running from Jan 2009 to Aug 2026. The complete series with an interactive chart, free to download.
This indicator in the Yield curves table
| Indicator | 08-2026 | 07-2026 | 06-2026 | 05-2026 | 04-2026 | 03-2026 | 02-2026 | 01-2026 | 12-2025 | 11-2025 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Overnight index swap rate | |||||||||||
| 1 year | 4.1 | 4.07 | 3.91 | 3.96 | 4.19 | 4.1 | 3.35 | 3.49 | 3.49 | 3.53 | |
| 2 years | 4.27 | 4.23 | 3.98 | 4.02 | 4.26 | 4.16 | 3.31 | 3.49 | 3.45 | 3.47 |
Understanding UK overnight index swap rate: 1 year
Capturing the twelve-month duration point on the swap curve for the United Kingdom, this indicator quantifies the market-implied cost of borrowing over a full annual cycle. It aggregates derivative contracts that exchange fixed interest obligations for floating payments benchmarked against the official policy rate. Positioned beyond the very near-term meetings, this metric internalises the expected trajectory of monetary adjustments across an entire calendar cycle, differing from shorter swap tenors by absorbing multi-quarter inflation and growth forecasts while avoiding the structural term premiums embedded in multi-year sovereign debt instruments.
Analysis of this series benefits from focusing on month-on-month shifts to capture evolving policy consensus rather than seasonal patterns, which have minimal structural impact on swap pricing. Early indicative curve fits are subject to minor smoothing adjustments as pricing models ingest complete monthly settlement matrices. Comparing this twelve-month measure against longer-dated swap rates illustrates the steepness or inversion of the near-term yield curve, while comparing it with standard government bond yields highlights the divergence between swap-based expectations and physical bond market liquidity pressures.
Frequently asked questions
- What timeframe does the one-year swap rate encapsulate?
- It covers market pricing for the official policy rate averaged over the coming twelve months.
- Does this indicator experience seasonal distortions?
- No, swap rates reflect continuous monetary expectations rather than seasonal economic activity.
- Why look at the one-year swap instead of a spot policy rate?
- It reveals where markets anticipate the policy rate will average over the next year rather than where it stands today.