2019
£m
2018
£m
Interest payable
Interest payable on borrowings held at amortised cost(1)232.0265.9
232.0265.9
Fair value (gains)/losses on debt and derivative instruments
Fair value hedge relationships:
Borrowings(2)47.4(149.2)
Designated swaps(2)(3)(29.7)159.6
17.710.4
Financial instruments at fair value through profit or loss:
Borrowings designated at fair value through profit or loss(4)32.8(27.8)
Associated swaps(5)(6)(37.1)63.7
(4.3)35.9
Fixed interest rate swaps(5)19.1(87.4)
Electricity swaps(7)(8.0)
Net receipts on derivatives and debt under fair value option(40.6)(20.4)
Other swaps(5)(8)2.2
Realisation of fair value loss on settlement of borrowings held at amortised cost(9)23.1
Other(1.4)(3.1)
(22.9)(93.6)
Net fair value gains on debt and derivative instruments(10)(9.5)(47.3)
222.5218.6

Notes:

  1. Includes a £98.3 million (2018: £137.8 million) non-cash inflation uplift expense repayable on maturity in relation to the group's index-linked debt.
  2. Includes foreign exchange losses of £37.6 million (2018: £56.5 million gains). These gains/losses are largely offset by fair value losses/gains on derivatives.
  3. Under the provisions of IFRS 9 'Financial instruments', changes in fair value resulting from changes to the foreign currency basis spread (£2.2 million gain) are recognised in other comprehensive income rather than profit or loss as they relate to items designated in an accounting hedge relationship. In the prior year, there was an £8.1 million gain on designated swaps recognised within profit or loss.
  4. Under the provisions of IFRS 9 'Financial instruments', changes in fair value due to changes in the group's own credit risk (£6.6 million gain) are recognised in other comprehensive income rather than within profit or loss. In the prior year, there was a £24.0 million loss, which was recognised within profit or loss.
  5. These swap contracts are not designated within an IFRS 9 hedge relationship and are classed as 'held for trading' under the accounting standard. These derivatives form economic hedges and, as such, management intends to hold these through to maturity.
  6. Includes a £3.8 million gain caused by the settlement of certain cross-currency interest rate swap liabilities.
  7. From 1 April 2018, under the provisions of IFRS 9, electricity swaps have been designated within cash flow hedge relationships. Gains or losses resulting from the effective portion of the hedge are recognised within other comprehensive income in the cash flow hedge reserve. Any other gains or losses are recognised immediately in the income statement. The cash flow hedges are deemed to be fully effective and, therefore, have no impact on net fair value gains in the income statement. In the prior year, the electricity swaps were not designated within a hedge relationship and an £8.0 million gain was recognised in net fair value gains in the income statement.
  8. Includes fair value movements in relation to other economic hedge derivatives relating to debt held at amortised cost, which matured during the year ended 31 March 2018.
  9. The fair value loss in the prior year results from the partial close-out of £50.0 million RPI index-linked notes due April 2043. The portion of the notes closed out had a nominal value of £30.0 million (carrying value £41.3 million), and were purchased at a fair value of £64.4 million resulting in a £23.1 million fair value loss.
  10. Includes £30.6 million income (2018: £23.5 million) due to net interest on derivatives and debt under fair value option.

Interest payable is stated net of £37.4 million (2018: £39.7 million) borrowing costs capitalised in the cost of qualifying assets within property, plant and equipment and intangible assets during the year. This has been calculated by applying a capitalisation rate of 3.1 per cent (2018: 3.6 per cent) to expenditure on such assets as prescribed by IAS 23 'Borrowing Costs'.