!!! Impact of Lower Interest Rates on Economy !!!

     According to the study of international affairs today, it is important to study about how lower interest rate could affect the economy of a country and how well it could help the economic growth. My understanding of this article is that, the Bank of England’s interest rates would like to stay low as long as the economy is weak. This article mainly relies on its reference to secondary sources.

 Interest rates are basically the market pricefor offering money.

    In my opinion, lower interest rates make it inexpensive to borrow, which encourages spending and investments among consumers. A fall in interest rate might shake the economic growth and  business as well. Low interest rate means low inflation, which means lower income growth. Basically, lower interest rates will increase disposable income. No matter how well the business runs, it merely depends on the economic environment to be healthy. When interest rate remains low, business may borrow money willingly. And, customers have more cash after they pay their loan payments, and they can spend this extra cash to boost their spending which in turn positively affects the economy. 
    Lower interest rates mean that the costs of borrowing are less; therefore consumers will feel like they are cash rich and be more tempted to spend money in shopping and buying other things. On the other hand, prices tend to rise when interest rates are low, because it will stop consumers from spending too much money which could affect the economy in a negative way.

    Low interest rates help the economic growth in a big way. For example, when interest rates are lowered, peoples' borrowing power goes up, which lead to consumers having more money to spend, causing the economy to grow and inflation to rise.

    In conclusion, lower interest rates overall could boost the economy in a positive way.