Report on interest rate, exchange rate and inflation report on Safeway Plc.

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To: Mr Elkon                From: Karan Varma

Date: 20th June 2004

Report on interest rate, exchange rate and inflation report on Safeway Plc

To Mr Elkon

1.1        In this report I will talk to you about three different rates, can effect Safeway and if the effect will be good or bad. I will be talking about

  • Interest rate
  • Exchange rate
  • Inflation

Interest Rate

2.1        The government decide by how much the interest rate moves either up or down. The government have two way of affecting the economy they are the fiscal policy and monetary policy.

2.2        I will be talking about the monetary policy it involves changing rate. When the interest rate is lowered down, it’s cheaper to borrow money but you will get less interest when you put money into the bank.

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2.3        When the interest rate goes higher, it will be more expensive to borrow money but you will get much more interest when you put money into the bank.

2.4        For me it is better for Safeway to save money by spending less and not spending over the budget, as the interest rate will hit them financially pain fully. The government is very clever because he give the control of interest rate to an unelected central bank, which I may think it is the Bank of England in an attempt to avoid the blame.

2.5        High interest rate are bad ...

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