Interest rates on the rise
On 2 November, the Bank of England announced that it was raising interest rates for the first time in over a decade. Interest is the cost of borrowing money and the reward for lending it. For example, if you want to borrow £100 from the bank, the bank might say yes, but you will have to pay back the £100 and a little bit extra. The extra amount is the interest. The interest rate is the percentage of the original amount that is added on. So if you borrowed £100 and the interest rate was 2%, you would have to give the bank £102 all together. If you lend the bank money, by asking it to look after your savings, it will reward you by giving you a bit more money.