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The base rate is a cost at which they can borrow in bulk from a reliable lender. It’s not a hard limit on a rate a provider can charge.
And there are other sources of funding - like you say deposits, and things like capital markets.
So right now there is a price war and some are in the position to acquire customers by using alternative sources of capital and think that they will still profit during the lifetime of the loan because the base rate will come down in time.
Howard
This is a noob question, but how are banks able to offer rates below the BOE base rate? I always thought it was an effective floor for rates.
Banks cost of capital is below BOE, because they have fixed deposits or issued bonds historically before rates increased?