1. The cost of borrowing money and the return for lending money.
Interest Rates:
The cost of borrowing money and the return for lending money.

2. The Bank of England

3. The effects of interest rate changes
Changes in interest rates affect virtually every part of the economy – from homeowners with a mortgage, to business confidence, to the exchange rate and the prospects of UK exporting businesses

4. Higher interest rates: Who gains and who loses?
A homeowner with a variable rate mortgage of £280,000
A pensioner couple who have paid off their mortgage and have some savings in a building society account
A young married couple with few savings who find that they cannot afford to buy their first property
A travel agent, 70 per cent of the holidays they sell are to British consumers to overseas destinations
A manufacturer of kitchen units in the West Midland with a high level of bank loans
Workers in a UK factory that manufactures and exports sports clothing to the United States

5. Go to: http://www.bized.co.uk/cgi-bin/ked/ked.pl
What is the relationship between
Interest rates and GDP Growth
Interest rates and inflation

6. Interest Rates and Inflation
The consensus view is that the Bank of England’s decisions on interest rates have been successful in keeping inflation within target range whilst at the same time allowing the economy to grow with sufficient strength for employment to rise and unemployment to fall

7. Interest rates and house prices

8. Evaluation: “it depends on…” The size of interest rate change
Whether you are a saver or borrower
The relative size of consumer income