What are interest rates?

The Bank of England is expected to increase interest rates. The UK interest rate is currently 4% but this could rise to 4.25%- this would be the 11th rise in the row.

What are interest rates?

The interest rate is the amount you are charged for borrowing money. When interest rates go up, you pay more interest on borrowed money.

The Bank of England increases interest rates when prices are going up too quickly- and this is what inflation is.

Recent figures show that inflation in the UK jumped from 10.1% in January t 10.4% in February.

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