Interest Rate Change
Increase/decrease in borrowing costs.
Real World
When interest rates rose sharply in 2022–23, housebuilder Barratt Developments reported a sharp fall in new home reservations as mortgage costs priced buyers out, directly reducing the firm's revenue forecasts.
Exam Focus
Always specify the direction of change and chain the effect: rate rises → dearer borrowing → lower investment/consumer spending → impact on named business.
How well did you know this?