Interest rates are the price of borrowing money and a reward for delaying consumption. They influence mortgages, business investment, government financing and the value of financial assets.
When rates rise, borrowing generally becomes more expensive. This can slow demand and reduce inflationary pressure, but it can also make investment harder and increase debt-service costs. When rates fall, the reverse can happen: credit becomes easier, although excessive borrowing can create new risks.
The important point is that interest rates affect different groups differently. A saver, homeowner, renter, indebted business and government can all experience the same rate change in different ways.