Bank Of England Base Rate
The Bank of England routinely makes loans to other financial institutions and when they do, the interest due on the loan is known as the Bank Of England Base Rate. The base rate is set solely by the Monetary Policy Committee of the Bank of England, whereas for most of the last two decades of the last century the responsibility for the base rate rested with the UK government. The Bank of England Base Rate is also set to meet and exceed the UK’s inflation rate and so maintain financial and monetary stability. The base rate was previously known as the Minimum Lending Rate. Banks do not have to stick religiously to the Bank Of England Base Rate but in practice they do tend to follow it.
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