The rate of interest at which US banks lend money to first-class borrowers. It is similar in operation to the base rate in the UK. Competitive markets have forced many banks, both in the USA and the UK, to offer business customers credit at below prime rates. The main difference between US and UK practice is that the US prime rate is approximately equal to the dollar three-month London Inter Bank Offered Rate (LIBOR) plus 1%, whereas the UK base rate is approximately equivalent to the sterling three-month LIBOR.

• finance
• Finance Act
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