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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What impact will prolonged austerity have on interest rates?

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Public Finances and the Economy

Time to shine a light on how fiscal and monetary policy interact With prominent members of the Bank of England’s Monetary Policy Committee (MPC) – not least the Governor – lining up in recent weeks to talk up the prospect of rate rises at some point in the coming months, we can expect next week’s … Continued

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The repossessions timebomb: how to help homeowners at risk of default

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Housing, Wealth and Debt

Against the backdrop of the most prolonged recession in living memory, the relatively small increase in homes being repossessed has been a welcome surprise. Numbers did spike, but they never reached the levels of the early 1990s and have been coming down steadily over the last four years. This owes something to government support programmes, … 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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The Bank’s conundrum countdown – Tightening policy in the shadow of a debt overhang

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Public Finances and the Economy

If Mary Poppins taught us anything, it’s that a British bank is run with precision. But against a backdrop of rapidly changing and sometimes conflicting economic data, the balancing act currently facing the Bank of England requires a level of calibration rarely before seen. Clearly monetary policy must be tightened over the coming months and … Continued

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