Economic Matters
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Why Interest Rates Are the Way to Combat Inflation
The bank of england is trying to keep inflation at two per cent in the medium term. Toson: We've given them clear levers with which to achieve that objective. And so i suppose it's not surprising that they're pulling that lever now that we've clearly got inflation well in cess of two %. The theory is that if you increase interest rates, you make it more expensive to borrow money, which means it's harder for the economy to expand.
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