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Notes to the Consolidated Financial Statements

6. Net finance costs

All figures in £ millions Notes 2007 2006
Interest payable (114) (117)
Net foreign exchange losses (25) (2)
Other losses on financial instruments in a hedging relationship:
– fair value hedges (1)
– net investment hedges (1) (2)
Other losses on financial instruments not in a hedging relationship:
– derivatives (9) (12)
Finance costs (150) (133)
Interest receivable 19 23
Finance income in respect of employee benefits 24 10 4
Net foreign exchange gains 8 21
Other gains on financial instruments in a hedging relationship:
– fair value hedges
– net investment hedges
Other gains on financial instruments not in a hedging relationship:
– amortisation of transitional adjustment on bonds 1 8
– derivatives 6 3
Finance income 44 59
Net finance costs (106) (74)
Analysed as:
Net interest payable (95) (94)
Finance income in respect of employee benefits 24 10 4
Net finance costs reflected in adjusted earnings (85) (90)
Other net finance (costs)/income (21) 16
Total net finance costs (106) (74)

The £1m net loss on fair value hedges comprises a £20m loss on the underlying bonds offset by a £19m gain on the related derivative financial instruments.

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