Interest Rates
Co-Founder•1 min read
Interest rates represent the cost of borrowing money or the return earned on savings or investments, expressed as a percentage of the amount borrowed or deposited.
They are set by central banks (like the Bank of England) for base rates, and then adjusted by lenders based on risk, product type, and market conditions.
Higher interest rates make borrowing more expensive but can increase returns on savings — while lower rates tend to stimulate borrowing and investment.
Example:
If you borrow £10,000 at an annual interest rate of 6%, you’ll pay £600 per year in interest (before fees or compounding).
Used in:
Loans, mortgages, savings accounts, FX markets, and broader economic policy.