Question : Is there a connection between the interest rates banks set and the Bank of England's interest rate?
Is there a connection between the interest rates banks set and the Bank of England's interest rate? Does the Bank of England control the retail bank's interest rates? Or do the banks set them independently of the Bank of England?
- asked by smsmgs2002
All Answers:
Answer #1
There is a conection between the two. When the BOEincreases the rate this increases the rate thatthe retail banks have to pay back to the BOE. Theretail banks naturally pass this on to theircustomers.
- answered by ROBERT A
Answer #2
The BoE is connected to all banks in the moneymarkets but does not control their interest ratesdirectly. The last interest change by the BoE wasa 0.25% decrease but Egg the online bank decreasedby 0.5% all savings accounts to make more moneyfrom their savers.Most banks will follow the BoElead but their may be a delay in doing so orlarger cuts or smaller increases to increase theirprofits.In Amercia their central banks cutdrastically but very few banks followed their leadat all!
- answered by Cyfran
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