I should admit that I do not own a car and rely on public transport, so I am noy someone who simply is not willing to give up their car. I’m glad to hear from one of the 22.4% who voted yes, and would enjoy hearing your views on my alternative strategy.

Thanks for reading, and all the best for the new year and beyond.

From what I remember, the info booklet that came with the voting form had about eight pages of “benefits of voting yes” and one page about the congestion charges - it seems everybody was just drawn to that.

Cheers!

Interest rates affect several diiferent issues, and come in different forms.

The simplest, and one that we are all most familiar with, is your banks interets rate. You will have noticed that they have a rate for lending to you, and a different one for if you have savings.
The lending rate is the way the banks earn a profit on the money they lend. This is usually slightly above the central bank rate, because the banks assume that some customers will default, and the money will be lost. The good payers subsidise this. As with all goods/services/products, banks compete with each other for our business, so rates will vary slightly, as will the terms and conditions of any loan.

With central bank interest rates, there is usually just one rate. Each country has a central bank, and that institute guarantees the currency. Eg. with Britain, the notes (£5,10,20,50) all still bear the statement that ‘the bearer is entitled to..’ This guarantees the legal tender. This is all backed up by what sed to be called the ‘Gold Reserve’, though nowadays it is not just big lumps of gold, there are also large sums of foreign currency. You may remember that a few years ago, when Chancellor of the Exchequer, Gordon Brown sold a large amount of our gold reserves off, and purchased Euros. You may also have heard on the news reports about ‘interbank lending’, and the fact that the banks aren’t lending each other money. The central bank is also the government and banks bank.
Reducing the base rate to almost 0% means that it is easier, and less risky to the banks, for the banks to borrow money and to start spreading that money across the country. If they lend to businesses at 4%, most businesses would be able to pay that back, and the bank would make nearly 4% profit. If the central rate was 4%, and the banks lent at 8%, more businesses would default because of the interest charges.
If banks pass the reduction on to the customers, then it becomes easier for people to repay their debts, reducing the level of defaulters, reducing losses for the banks.
There is another side to the coin, however, which affects those people who are fortunate enough to have savings. These individuals will gain nothing by having savings in bank accounts. In a recession, this can actually make these people look for other places to put their money; stocks and shares, government bonds, gold, silver, etc. Alternatively, they may actually spend the money on house improvements, new car, etc which helps businesses stay in business.

Unfortunately, such low rates can not be sustained forever. The effects are good during a recession, and can act as a ‘financial stimulus’ to the economy. However, in the long term, banks would cease to function; no profit margin if no interest rates. This would mean no lending, which almost all businesses need to help with start up costs for new business, or for investment for expansion or replacing machinery. There would be no mortgages, so the housing market would cease being a market. Capitalism needs money to move about to work.

When thinking of a countrys finances, or even the global economy, it can be helpful to think of it as a very complicated equation with lots of things on one side, and lots on the other, with an = in the middle. If both sides balance, an economy is stable but not growing. If the left is bigger, an economy grows, and vice versa. One of the numbers on one side is interest rates, along with total currency in circulation, speed of that circulation, government investment, and many, many more things. By altering any of these things, the balance gets tipped.

It can be a very difficult subject, with many strange terms and phrases, and I have simplified things greatly, but hope that this has helped answer your question.
If I can help any other, or if you agree/disagree with me, then please feel free to further comment. Thank you for your complimentary comments.