Interest rates

SHOTLIST AFP VIDEOGRAPHICS IMAGES: 02:11 - Cartoon style. Blue background, a box appears, followed by a yellow hand carrying a bag of cash.- Another hand appears underneath the bag of cash.- A second box appears with a squirrel looking alarmed.- A third box appears with a percentage sign.- A cartoon Earth appears. It becomes a dollar sign on the front of a bank building that takes shape.- The bank building is reduced. Smaller banks appear around it. Images representing businesses and individuals fill the screen.- Two piles of coins appear with an arrow between them.- A third pile of coins appears.- A bank façade is seen with a percentage sign. An alarmed squirrel appears on the right. The squirrel dissolves.- A large symbol representing a business, hands showing an exchange of money. Symbols of machinery and employees.- A couple appear and a house and car are shown.- Bank façade with a graphs. Two piles of coins appear.- The couple are back, as is the squirrel, this time with acorns. Consumer goods.- Symbols for companies and equipment. Pile of coins representing money.- The cartoon couple and house appear. AFP TEXTSeptember 9, 2020 The European Central Bank is expected Thursday to prepare the ground for new stimulus measures, armed with a new set of economic forecasts and amid signs of a resurgence of the coronavirus pandemic. The ECB will publish its latest assessments on the eurozone's growth prospects through to 2022, which will be closely scrutinised for signs of whether the worst of the pandemic's devastating economic impact is over. Inflation trends will also be key as fears of deflation are fuelled by sinking oil prices and consumers putting off purchases in the grim economic climate. The Frankfurt-based institution has unleashed unprecedented firepower to help the bloc fight its worst crisis. It is in the process of pumping 1.35 trillion euros ($1.59 trillion) into the eurozone economy through its pandemic bond-buying programme, known as PEPP...(continues) Script EN Interest is the cost of borrowing money or the reward for saving. It is measured by a percentage, or rate. The most important interest rate – one that affects the whole economy - is set by a country’s central bank. It is called the base rate.Central banks lend money to commercial banks, who in turn lend to businesses and individuals. Of course, they charge interest on those loans.The theory – and the hope – is that these loans lead to more spending and investment and a healthy economy. When a central bank cuts its base rate, it becomes less attractive to save. On the other hand, businesses are more likely to borrow money to invest in new machinery, or take on more staff. People feel more confident about taking out a mortgage on a new home, or buying a new car. To boost a sluggish economy a central bank may even introduce a negative interest rate to try to get lenders to invest in the real economy rather than hoard cash. But let’s not forget that the main task of any central bank is to provide a framework for the economy to grow sustainably, by targeting a steady currency and low inflation.So if - for example - prices are rising too fast, the central bank may want to intervene to cool the economy by pushing interest rates up. This would encourage people to save – they would tend to spend less on consumer goods. Companies may think twice about splashing out on new equipment, and retailers might cut prices to encourage trade. This in turn can calm inflation.However, people with - say - a mortgage on a house would suffer – their monthly repayments would increase.So - high or low - interest rates have an impact on all of us! Sources: Bank of England, Federal Reserve, European Central Bank SCRIPT FRL'intérêt est le coût d'emprunt de l'argent ou la rémunération de l'épargne. On le mesure en pourcentage, ou en taux. Le taux d'intérêt le plus important - celui qui affecte l'ensemble de l'économie - est fixé par la banque centrale d'un pays. C'est le taux de base.Les banques centrales prêtent de l'argent aux banques commerciales, qui à leur tour prêtent aux entreprises et aux particuliers. Elles facturent des intérêts sur ces prêts.L’objectif de ces prêts : encourager les dépenses et investissements et assainir l’économie. Quand une banque centrale abaisse son taux directeur, l’épargne devient moins attrayante. Cela incite les entreprises à emprunter de l'argent pour investir dans du matériel ou du personnel. Les particuliers sont moins frileux pour contracter une hypothèque sur une nouvelle maison ou acheter une nouvelle voiture. L’objectif principal de toute banque centrale est de fournir des conditions pour une croissance durable de l’économie, une monnaie stable et une inflation faible.Si par exemple les prix augmentent trop rapidement, la banque centrale peut intervenir en augmentant les taux d'intérêt. Cela encourage les gens à épargner et donc à dépenser moins pour des biens de consommation. Conséquence : les entreprises, doivent réfléchir à deux fois avant d'investir dans de nouveaux équipements, et les détaillants sont incités à baisser les prix pour encourager le commerce. Cela contribue à faire baisser l'inflation.Problème: les personnes qui ont emprunté pour une maison sont désavantagées : leurs remboursements mensuels augmentent alors.Qu’ils soient élevés ou bas, les taux d'intérêt, ont un impact sur nous.