How are Britannia interest rates affected by the Bank of England?
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Written on: 18.01.2010 [14:49]
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Amir
Amir
Topic creator
Posts: 3
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How are Britannia interest rates affected by the Bank of England? I don’t really get the connection between the two. Are Britannia’s rates linked with the BoE and then if they rise the rise is then exactly the same for Britannia? Or is it a percentage that is kept relative to the BoE rate? Can retail banks and building societies challenge the rates? Or is it set in stone? |
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Written on: 23.01.2010 [11:32]
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Pickering
Pickering
Posts: 1
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There is a connection between the two but it isn’t really a law that says that there has to be. It is simply that when the BoE rate increases they charge the banks more and the banks have to pay back more money to the BoE. Therefore when this happens they usually increase their rates too in order to make up for the increase they are paying. This is why when the rates decrease not all banks decrease automatically because they don’t really have to. |
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