Notes contentsNotes to consolidated financial statements

6. Net finance costs


All figures in £ millions Notes 2008 2007
Interest payable   (106) (114)
Net foreign exchange losses   (11) (25)
Other losses on financial instruments in a hedging relationship:      
— fair value hedges   (7) (1)
— net investment hedges   (1)
Other losses on financial instruments not in a hedging relationship:      
— derivatives   (12) (9)
Finance costs   (136) (150)
Interest receivable   17 19
Finance income in respect of employee benefits 25 8 10
Net foreign exchange gains   8
Other gains on financial instruments in a hedging relationship:      
— fair value hedges   2
— net investment hedges   1
Other gains on financial instruments not in a hedging relationship:      
— amortisation of transitional adjustment on bonds   1 1
— derivatives   16 6
Finance income   45 44
Net finance costs   (91) (106)
Analysed as:      
Net interest payable   (89) (95)
Net foreign exchange losses reflected in adjusted earnings   (7)
Finance income in respect of employee benefits 25 8 10
Net finance costs reflected in adjusted earnings   (88) (85)
Other net finance costs   (3) (21)
Total net finance costs   (91) (106)

The £5m (2007: £1m) net loss on fair value hedges comprises a £156m (2007: £20m) loss on the underlying bonds offset by a £151m (2007: £19m) gain on the related derivative financial instruments.