1. The rate of interest used by commercial banks as a basis for charging for loans. Most borrowers pay a premium over base rate, whose size depends on how risky loans to them are considered to be, and what collateral they can provide.

2. An informal term for the rate at which the Bank of England lends to discount houses (this corresponds to the minimum lending rate that was abolished in 1981). The rate at which the Bank of England lends governs interest rates elsewhere in the banking system.