Rising interest rates exert a disproportionate burden on ordinary citizens compared to the affluent. As borrowing costs climb, essential expenses such as rent escalate annually, personal loan repayments become heavier, and consumer credit options like credit cards and "buy now, pay later" schemes grow significantly more expensive. For businesses, the higher cost of capital makes expansion and capital investment—such as opening a new factory—prohibitively expensive. Consequently, companies curtail recruitment and freeze hiring to protect margins. Central banks raise rates deliberately to dampen aggregate demand and curb inflation.
While this policy succeeds in stabilizing prices, it creates a paradox: those with substantial savings benefit from generous returns on deposits, whereas wage earners with little surplus income bear the brunt of reduced purchasing power and job insecurity. You are welcomed to add more
