Bank of England Base Rate
The interest rate set by the Bank of England's Monetary Policy Committee, which influences the cost of borrowing across the UK economy.
The Bank of England base rate (also called the Bank Rate) is the most important interest rate in the UK. It is set by the Monetary Policy Committee (MPC) and reviewed approximately eight times per year. The base rate directly influences the rates charged by commercial banks and lenders for mortgages, loans, and savings.
For business borrowers, many secured loan products are priced as a margin above base rate. For example, a secured business loan priced at 'base rate + 4%' would cost 9% per annum if the base rate is 5%. When the base rate rises, borrowing on variable-rate facilities becomes more expensive. Fixed-rate loans are unaffected once drawn down.
The base rate is published on the Bank of England website after each MPC meeting. Businesses on variable-rate facilities should track base rate movements carefully to anticipate changes in their monthly repayment costs.
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