The Economy: 2. Interest Rates and Mortgage Rates
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What Is the Bank of England?
High street banks don't only get money from the Bank of England. They fill that gap themselves by issuing debt, issuing bonds. That means they go into international markets and say can we borrow from you? We'll pay you back at a certain date and a certain interest rate. Interest rate is going to be very closely related to the interest rate that the governments face. And that's a second reason that the banks might raise their mortgage rate. But really importantly, that is not a reason that the Bank ofEngland can control with any great accuracy.
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