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Case study


Read the article ECB hikes interest rates as UK rates remain at record low and then answer the questions that follow. (You can read the article in the web window below, or follow the previous link to read the article in a new web window)


  1. Identify the reasons whythe European Central Bank is increasing its interest rates.
  2. Explain, why is the UK's Bank of England is keeping its base interest rates at a 28 month all-time low of 0.5%.
  3. Describe what is meant by the Bank of England's base rate (you might have to do some research here).
  4. Explain whythere is pressure from some quarters for the Bank of England to increase its base rate.