How to build commercial awareness
What interviewers mean by it, a routine that fits around a degree and a way to talk about any story
5 min read
Commercial awareness is understanding how businesses make money, what changes their fortunes and how that connects to the firm you want to join. Interviewers aren't checking whether you've memorised the headlines. They want to see that you can take something happening in the economy or a market, explain why it matters and reach a sensible view.
Expectations grow with the role. A first-year applying for a spring week might explain why higher interest rates change a mortgage lender's profits. A graduate candidate is expected to go further: what the same change means for the division's clients, its deals or its trading.
What interviewers are looking for
- Accuracy: the facts right, including the rough size of the numbers
- Cause and effect: why something happened and what it leads to
- Relevance: a link to the firm, the division or its clients
- Judgement: a view you can defend, with the risks that could prove it wrong
- Curiosity: evidence that you follow things because they interest you
A routine that fits around a degree
Twenty minutes a day is plenty if you use it well. Reading more headlines matters less than going deeper on a few stories and practising saying them out loud.
- Follow five numbers every week: Bank Rate, the latest CPI inflation rate, the ten-year gilt yield, GBP/USD and the FTSE 100
- Read one primary source a week, such as a Bank of England rate decision, an ONS release or a company's results statement
- Keep a page of notes for each story you follow, with what happened, why and what to watch next
- Go deep on two or three stories rather than skimming twenty
- Say one story out loud each week, to a friend or to your phone's camera
Start with the explainers
The six explainers on this site cover the ideas behind most markets stories: Bank Rate, inflation, gilts, sterling, equity indices and M&A cycles.
Choose stories that fit the role
Any well-understood story is better than none, but a story that connects to the division shows you know what the job involves.
| Area | Stories that fit |
|---|---|
| Investment banking | Takeovers, listings and refinancings, and why companies are doing them now |
| Sales and trading | Rate decisions, inflation data and currency moves, and how clients respond |
| Asset management | Where investors are putting money, how valuations look and what rates do to returns |
| Audit and advisory | Company results, regulation and businesses changing how they make money |
| Risk | Borrowers under pressure, market swings and how firms protect themselves |
A structure for talking about any story
When an interviewer asks which story you've been following, a clear structure stops you reciting a headline and gives them places to ask follow-up questions.
- What happened: the key facts in a sentence or two, with a number
- Why it happened: the drivers, such as costs, interest rates, competition or regulation
- Who wins and who loses: customers, competitors, lenders or shareholders
- What it means here: the work it could create for the division, or the risks for its clients
- What you'd watch next: a decision, a data release or a number that would change your view
Worked example: a cut in Bank Rate
Suppose the Bank of England cuts Bank Rate by a quarter of a percentage point. Here is how the structure might sound for a candidate applying to a corporate banking team.
- What happened: the Monetary Policy Committee cut Bank Rate by 0.25 percentage points, with a split vote
- Why: inflation had fallen closer to the 2% target and the committee was more worried about weak growth
- Winners and losers: borrowers on variable rates pay less, while savers and banks earning a margin on deposits lose out
- What it means here: cheaper borrowing could make businesses more willing to refinance or invest, which means more lending conversations
- What to watch: the next inflation figure, and whether the vote split suggests further cuts
The questions you're likely to get
- Tell me about a story you've followed: use one of your prepared stories and the structure above, and finish with your view
- What's been happening in markets?: give the direction of your five numbers and one reason behind the biggest move
- How would this affect our business?: think through revenue, costs, clients and risk in that order
- Pitch me a company or a deal: one sentence on the idea, two reasons, one risk and what would change your mind
If you don't know something, say so and reason from what you do know. Interviewers learn more from a candidate who works through a problem out loud than from one who bluffs.
Mistakes to avoid
- Reciting a headline with no view on why it matters
- Choosing a story you can't explain beyond the first paragraph
- Making a confident prediction without saying what would prove you wrong
- Leaning on party politics rather than the economics
- Using a story that has moved on since you last read about it
Where to find primary sources
Primary sources give you the facts before anyone adds a spin, and interviewers notice when you quote them. These are good places to start.
- Bank of England for rate decisions, the Monetary Policy Report and financial stability
- Office for National Statistics for inflation, GDP and the jobs market
- UK Debt Management Office for how the government borrows through gilts
- Office for Budget Responsibility for forecasts of the economy and public finances
- The Takeover Panel for how bids for UK listed companies work
- Company investor relations pages for results statements and presentations
Your university library may also give you access to financial newspapers and data, so it's worth checking before you pay for anything.
Practise saying it
Reading builds knowledge, but interviews test how you explain it. Check the ideas with the quiz, then record yourself talking about a story for 90 seconds with the video interview recorder. Nothing you record leaves your device.