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  Sid - the base rate is only one factor that goes into the setting of interest rates on borrowing. Rises and falls are not necessarily in-line with those movements. At higher base rates there is more room for the rates to reflect better the base rate movements.
  
  There is the risk premium for fraud and defaults (there is always higher risk during a recession). The admin costs and provider margins also need to be maintained and tend increase relative to a lower interest rate as many of these costs are fixed. Also the bank base rate does not always reflect the underlying rate being paid by the business. Take LIBOR - the interbank lending rate, that was 0.61% in December with the base rate 0.5%, for instance.

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