With central banks in many countries including the UK and the USA raising policy interest rates, we have added two short topic videos to our reference section on how increased interest rates might affect aggregate demand and supply.

In the UK, we might be reaching the peak in base rates during the current tightening phase. Bank of England monetary policy committee member Silvana Tenreyro has said monetary policy is too tight - meaning interest rates are too high - and she would vote for a cut to prevent inflation getting well below the 2% inflation target next year.

Monetary Policy - Interest Rates and Aggregate Demand | A level Economics

Monetary Policy - Interest Rates and Aggregate Supply | A level Economics