The Bank of England base rate, sometimes referred to as the repo rate, is used as a benchmark for all other interest rates (usually expressed as a margin above base rate) and is the minimum rate at which banks are prepared to lend money. The Base Rate was introduced by banks following the abolition of the Minimum Lending Rate by Geoffrey Howe, the then Chancellor of the Exchequer, in 1981.
The high street banks' base rate changes following the Bank of England's signals through its daily money market operations. The central bank moves base rates by changing the dealing rates at which it buys bills from the discount houses.
