Blog & Articles

Once interest rates start rising, how can indebted households be helped through the painful transition?

Date: 24. July 2014
Gavin Kelly

Whether it is this autumn, the New Year or shortly after next May’s election, everyone knows that interest rates are going to start rising sometime relatively soon. Yet despite the endless "guess the month" speculation about the precise timing of the first rise, little thought has actually been given to the bigger and longer-term question of ensuring the right framework is in place to ease the painful transition back to more normal interest rates for Britain’s borrowers.

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Plugging the gap

Date: 2. October 2013
Matthew Whittaker

Have lower rates helped to plug the income/expenditure gap?

The latest Economic Review from the ONS provides the usual useful compilation of recent economic outputs, reinforcing the sense of momentum underpinning recovery, but questioning just how balanced this new growth is.
One of the most important imbalances it picks up is between consumption and investment. Although still some way short of its pre-crisis peak, the proportion of gross final expenditure (the sum of final uses of goods and services produced by, or imported to, the UK) accounted for by household expenditure has increased from an average of 46.2 per cent in 2011 to 46.9 per cent in Q1 2013.

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The ticking debt bomb?

Date: 2. May 2013
Matthew Whittaker

This blog originally appeared on Public Finance

When the financial crisis first hit, politicians of all parties talked up the notion of ‘rebalancing’ the economy, moving away from a growth model dependent on financial services, house price increases and consumption and towards one based on the real economy and on trade. Five years on and, with little sign of a sustained economic recovery, the chancellor appeared to wind the clock back in his last Budget.

The new Help to Buy scheme is designed to give a shot in the arm to the housing market, making it easier for households who are currently considered too risky by lenders to get onto and move up the housing ladder.


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Family debt

When rates finally rise, things are set to get nasty

Date: 18. July 2011
Gavin Kelly and

This blog first appeared in the New Statesman.

A good recession followed by a bad recovery. Trite lines like this are often wide of the mark, but this one bears some truth. The fallout of the economic downturn over the last few years – though harsh - was less gruesome than first feared in terms of overall unemployment, bankruptcies and repossessions.

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