Interest rates

Good question my man and I too don't know how it does or how it's supposed to work - lets hope we've one or two who are world economics savvy here 

The basic aspect I do know is increased interest rates hurt borrowers and make savers / people with money smile. 

Agree with Dave.

From my days of studying economics , many many years ago, and very basically.
It’s a very blunt tool. So interest rates go up making it more expensive to borrow so people borrow less or pay more to borrow so less money is there to buy things. Then basic rule of supply and demand, if you believe people behave like that, sees people buying less and so prices drop to get people to buy at previous levels, pure capitalism in action.

Also it is expected there will be pressure on the job market as less is being bought, less is created so less need to employ people. Unemployment rises and so less power for employed in bargaining for a pay rise. So it would be expect people would take smaller pay rises rather than loose their jobs.

Of course this is strictly academic application of a capitalist approach and people do not necessarily behave as expected.

I’m sure others can add to this, but In essence that’s how I see it.

Rates go up and people are put on the scrap heap to keep inflation down. But high inflation causes all sorts of other issues which could also result in people loosing their jobs and value of any savings they have.