2 min read
Definition
The Bank of England base rate (Bank Rate) is the rate the Bank pays on reserves held by commercial banks, set by the Monetary Policy Committee at eight scheduled meetings a year. It anchors the wider cost of money, so when it rises or falls, variable business rates tend to follow.
In plain terms
It is the lever the Bank pulls to steer inflation. A base-rate-linked loan moves in step with the MPC’s decisions; a fixed-rate loan does not, for its fixed period.
Why it matters for your company
If your facility is base-rate-linked, track MPC meeting dates and model a rise before you borrow. See how base-rate changes hit your repayments.
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Reference rate
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Variable rate
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Rate pass-through
Rate pass-through is how much of a benchmark change actually reaches your loan rate — full on a tracker,…
Read →Base rate (Bank of England)
The Bank of England's benchmark interest rate, which influences the cost of variable-rate borrowing across…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.