Interest Rates
- Created by: Jess
- Created on: 02-12-12 18:58
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- Interest Rates
- The cost of borrowing money.
- The amount gained on savings
- Charged on
- credit cards
- overdrafts
- mortgages
- loans
- hire purchases agreements
- The Bank of England
- It's currently 0.5% and has been for about 3 years
- Meet monthly to decide if interest rates need to change
- Set the interest rates.
- Impact of increasing interest rates
- increases prices
- menu costs
- reduced investment & spending
- increased costs of living
- increased business costs
- raw materials etc - show leather costs
- reduced house buying
- increases in renting
- increased cost of borrowing
- reduces customer spending
- increases prices
- value of the pound
- increased value of the pound
- exports become more expensive
- imports become cheaper
- more investment could come into the uk
- impact of businesses
- increased wage demands
- increased costs
- delayed growth plans
- Impact on consumer spending - high interest rates
- cut back on loans
- reduced demands for houses
- constructing industry will suffer
- less likely to buy on credit
- cars, sofas, holidays
- increased rates on savings
- higher mortgage payments
- increased value of the pound
- luxury goods will suffer the most
- demand for cheaper and value products could increase
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