On borrowed time? The need to make the most of the ‘window of opportunity’ provided by low interest rates

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Public Finances and the Economy

More than six years after the Bank of England’s base rate was cut to 0.5 per cent, interest rate rises finally appear to be back on the agenda. There may be good reasons for thinking that modest and gradual action will soon become appropriate, but the debt overhang associated with the pre-crisis credit boom continues … Continued

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Could we be set for two decades of lost pay growth?

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Jobs, Skills and Pay

Rarely have questions of household living standards and the shape of the public finances been so interwoven. The Autumn Statement – or, more specifically, the OBR’s Economic and Fiscal Outlook – identified a £25bn shortfall in tax revenues by 2018-19 relative to the projections in place at the time of Budget 2014. This is a … Continued

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To avoid squeezed households struggling, we must beware of premature interest rate rises

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Housing, Wealth and Debt

Thursday’s interest rate announcement from the Monetary Policy Committee is unlikely to generate many headlines. “Bank does nothing for 65th straight month” is hardly a circulation-booster, even during silly season. But we can expect plenty of speculation alongside the announcement that the consensus among MPC members on holding rates will have been broken for the first time since … Continued

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

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Housing, Wealth and Debt

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 … Continued

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