What is the Bank of England base rate? Big Money Questions

The Bank of England has just cut the base rate to 0.25 per cent – the lowest level in its 322-year history. 

On the latest episode of the Big Money Questions show, we take a step back and ask, what actually is the base rate and what has it got to do with our household finances?

Fund manager, economist and author of Money Eric Lonergan gives a one minute explainer, followed by a more detailed version and then talks to presenter Rachel Rickard Straus about why the rate is so low and what it means for our finances.

And for a grand finale, he explains the mysterious world of central banks and what they do through the simple analogy of a babysitting circle.