Topic updates
Interest Rates and Aggregate Demand and Supply
12th February 2023
With central banks in many countries including the UK and the USA raising policy interest rates, we have added two short topic videos to our reference section on how increased interest rates might affect aggregate demand and supply.
In the UK, we might be reaching the peak in base rates during the current tightening phase. Bank of England monetary policy committee member Silvana Tenreyro has said monetary policy is too tight - meaning interest rates are too high - and she would vote for a cut to prevent inflation getting well below the 2% inflation target next year.
We’ve raised #BankRate to 4% today. Inflation has started to fall, but it is still much too high. Raising interest rates is the best way we have to ensure low and stable inflation. Andrew Bailey explains more below. https://t.co/n7j94kLoaX pic.twitter.com/QRLtzXchxi
— Bank of England (@bankofengland) February 2, 2023
Monetary Policy - Interest Rates and Aggregate Demand | A level Economics
Monetary Policy - Interest Rates and Aggregate Supply | A level Economics
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Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.
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