1. Economics: Interest rates

Subject: Economics

Resource type: Lesson

Skills: Aiming High, Problem Solving

Click to download the resource

To Invest, or Not?: In this activity, students take on the role of Head of Finance at a local council. They need to evaluate the effect of changing interest rates on the decision to build a cancer research centre. Access our comprehensive resource package, including detailed teacher notes, PowerPoint, student worksheet and answer sheet. Adapt to your classroom’s needs for a dynamic learning experience.

Scenario

In August 2023, the Bank of England’s Monetary Policy Committee voted to increase the base interest rate by 0.25 percentage points to 5.25%. Rupert is Head of Finance at Harrowell Council and needs help to decide whether he should go ahead with an investment decision. The council are hoping to build a new cancer research centre at Nortonwick Park Hospital. In order for this to go ahead, the council will need to apply for a loan from the bank.

Learning Aim

To be able to understand the different rates of interest in an economy and their impact on saving, borrowing and investment.

Skills Builder Links

Aiming high step 4
I work with a positive approach to new challenges.

Problem solving step 6
I explore complex problems by identifying when there are no simple technical solutions.

Curriculum Table

England: The national curriculum (England)	The role of money and financial markets Students must know and understand the different rates of interest in an economy and their impact on saving, borrowing and investment.
Scotland: The National 5 Business Management	Personal economics Money choices – to spend, to save and to borrow; types of savings and interest rates.
Wales: WJEC GCSE in business specification	Currently, there is no WJEC GCSE economics qualification available. WJEC only provides Economics at A-Level.