TINAS
1) The UK “borrows” by issuing bonds over certain lengths to maturity, like 3, 5 or 20 years (and other various terms) in an auction. The market (pension funds, other states, punters, companies) buy the bonds for the lowest rate of interest that they will accept over the life of the bond before redemption.
The 0.5% base rate is the overnight lending rate at which UK banks can borrow from the treasury. Think iof it as a n overdraft, not a long term loan/bond.
2) Borrowing from the World Bank or IMF comes with massive provisos. They get to own your ass, bitch. You dont want to be doing that. It’s like getting a payday loan secured on your V5 from Lenny the Loan Shark.
3) Interest is not the same as amortisation (paying things back). No matter where interest goes, up or down, you still have to pay back the original loan amount. Either through a regular amortising payment, or through a final bullet payment at the redemption date/maturity.
as ever, my No.1 recommendation for anyone who wants to learn more is this very approachable and iluminating book.