The base rate is a rate set by the banks to price loans, and also reflects the state of the market. It is most commonly encountered when looking into loans including mortgages, and many building societies/banks offer base rate tracking mortgages. The figure represents the minimum rate of interest possible on a loan.
Bank base rates are available in a number of print volumes and web based services. In this knowledge guide we aim to guide you to the best sources on the net and in the Library. All the print sources mentioned here are available in the library and staff can consult them on your behalf.
The base rate is the rate at which the Bank of England lends to other financial institutions and is set by the Monetary Policy Committee in response to economic conditions. The retail banks usually follow this lead, although they have the freedom not to.
In modern times, the Minimum Lending Rate set by the Bank of England ended on 20th August 1981. Following this, rates were set by the government through the Bank of England. Responsibility for setting the base rate since 1997 rests solely with the Bank of England.
In using any base rate data it is important to be aware that different sources are used to compile these figures. In some instances the base rate data is taken from just one bank, and in other cases it is a compilation (one indicator that multiple banks have been used is that where the banks did not change rates on the same day a spread is shown, eg 5-5.25). In describing the information available we have tried to indicate the source(s) used at the time of writing.
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