base rate


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Base rate

British equivalent of the US prime rate.

Discount Rate

The interest rate at which the Federal Reserve makes short-term loans to member banks. The discount rate is an indicator of the direction in which the Federal Reserve is trying to push the broader economy. In general, a low interest rate indicates that it is trying to promote growth by making liquidity easily available, and a high interest rate shows that the Fed is concerned about inflationary pressures on the economy and trying to reduce the amount of money in the economy. Along with the sale of Treasury securities and the determining of the fed funds rate, setting the discount rate is one of the primary ways the Federal Reserve sets the monetary policy of the United States.

base rate

see INTEREST RATE.

base rate

the INTEREST RATE that is used by the COMMERCIAL BANKS to calculate rates of interest to be charged on bank loans and overdrafts to their customers. For example, a large company might be charged, say, an interest rate of base rate plus 2% on a loan, whereas a smaller borrower might be charged, say, base rate plus 4%. Formerly, base rates were linked directly to BANK RATE but are now fixed by reference to the ‘official’ rate of interest set by the MONETARY POLICY COMMITTEE of the Bank of England. See PRIME RATE.
References in periodicals archive ?
9% increase in natural gas base rate revenue, effective August 1.
As a resolution of the CR3 outage issues pending in the current docket before the FPSC, Progress Energy Florida will remove its existing nuclear plant from base rates starting in 2013 while the company continues to evaluate options for the plant.
The base rate, say experts, will give even the existing borrowers the option to shift to lower rates.
But on a brighter note, Lloyds TSB, which also lends under the Cheltenham and Gloucester brand, pledged to pass on any base rate reduction in full to customers on its standard variable rate.
Alan Greenspan's comments on the weakening USA economy are an important factor when assessing UK interest rate policy because, as the UK economy is more closely aligned to the US, any interest rate movements in the USA will have a significantly greater impact on UK economic policy than changes in the ECB base rate,' he said.
5 per cent above the Bank base rate, or the repo rate as it's sometimes called.
This is the second base rate reduction by the bank since April this year, when ICICI had cut its base rate by 0.
05 % in the base rate will have a minor impact on most individual borrowers.
There was a sequence of five base rate rises over the 12 months from August 2006 to July 2007.
An excellent low rate that tracks the Bank of England base rate is available from First Active.
Allegheny Power filed for a base rate increase on July 26, 2006 of $100 million (annualized), primarily due to the significant rise in the cost of fuel used to generate electricity.
The PSCW s written order on the approval of the base rate freeze is expected within the next two months.