The official bank rate
(also called the Bank of England base rate
) is the Bank of England
's key interest rate for enacting monetary policy
When an announcement of the change in interest rates is made this is the rate the Bank of England is changing. Changes are recommended by the Monetary Policy Committee and enacted by the Governor.
The name of this key interest rate has changed over the years. The current name "Official Bank Rate
" was introduced in 2006 and replaced the previous title "Repo Rate
" (repo is short for repurchase agreement
) in 1997. Previously (between 1981 and 1997) the title was "Minimum Band 1 Dealing Rate
" and prior to that the "Minimum Lending Rate
It is the rate at which the reserve bank lends money to the banks.