Notes to the accounts
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4 Finance costs
| 2007 £m |
2006 £m |
|
|---|---|---|
| Interest payable | ||
| On bank overdrafts and loans | 211.8 | 185.4 |
| On convertible debt | 6.9 | 7.6 |
| On obligations under finance leases | 5.7 | 5.6 |
| Gross interest payable – recurring | 224.4 | 198.6 |
| Interest capitalised on developments | (15.1) | (8.6) |
| Interest payable | 209.3 | 190.0 |
| Costs of termination of financial instruments | 2.0 | – |
| Issue costs written off on redemption of loans | 1.3 | 2.0 |
| Exceptional finance costs | 3.3 | 2.0 |
Interest is capitalised, before tax relief, on the basis of the average rate of interest paid of 6.25 per cent (2006 – 6.25 per cent) on the relevant debt, applied to the cost of developments during the year.