Base Rate

The Base Rate, also known as the Bank Rate or the Base Interest Rate, is set up by each country’s Central Bank. 

The interest rate is a percentage value that the Central Banks will charge commercial banks for loans.

Lower interest rates generally speed up the economy as borrowing and spending costs lower while higher interest rates tend to slow down the economy, often in order to fight and lower inflation.

When the interest rate is being raised it is often referred to as a “rate hike”. Central Bank members that opt for higher interest rates are called “hawks”. 

When the interest rate is being lowered it is often referred to as a “rate cut”. Central Bank members that opt for lower interest rates are called “doves”. 

Check out the Economic Calendar for the current regional Base Rates!