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Explained in plain English

Who pays interest?

When the Bank of England holds interest rates, it affects how much people and businesses pay to borrow money. If you have a mortgage or a loan, the interest you pay is linked to these rates. Banks also pay interest to the Bank of England when they borrow from it, which then influences the rates they offer customers.

Stories that explain this

Pound falls to $1.337 as the Bank of England holds interest rates

Questions this opens up

What is a mortgage? Who borrows from banks? Why do banks pay interest?

Related explainers

What are interest rates? Who is the Bank of England? What is inflation? Why does the pound fluctuate? Why do rates change? What is a 'strong' pound? Why borrow at 15% interest? How global interest rates connect

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