0 the rate of interest set by a central bank in a country that is the lowest rate at which it lends money to other banks. This rate affects the interest rates that are then charged to customers by the banks. --
1 the rate of interest that is set by a central bank, and which is the lowest rate at which it lends money to other banks. This rate affects the interest rates which are then charged to customers by the banks: --
2 the amount of interest that a bank charges: --
Falling bank rates have made interest-earning assets less attractive.
This is precisely what has happened; hence the rise in the bank rate.
These periods of high bank rate have been expensive for the building of new plant, and in other ways.
So they themselves may have to cut in the hope that the bank rate will be reduced later on.
The bank rate has been dealt with by my noble friend and by other speakers.
This increased bank rate has been made necessary by periodic crises.
Now let me come to the question of the high bank rate and dear money in general.
It affects the balance of payments, which in turn affects the bank rate, which fixes interest rates and the cost of money.
A high bank rate also involves higher rents and interest charges on mortgages.