Household debt· Monetary policy The Bank has increased borrowing costs, but is personal debt bubbling over? 5 November 2017 by Matthew Whittaker Following a period of double digit growth in consumer credit over the last year or so, there have been some concerns about the reappearance of a debt bubble in the UK economy. In truth though, household borrowing currently resembles less of a bubble and more of two day-old helium balloon: partially deflated and looking worse … Continued READ MORE
Monetary policy· Macroeconomic policy Crunching the numbers on today’s rate rise 2 November 2017 by Matthew Whittaker Interest rates are up. It may be a very modest increase but, for any number of reasons, the news is big. Ten years on from the last rise, today’s 0.25 percentage point increase in the Bank’s base rate (taking it back to the 0.5 per cent it sat at between March 2009 and August 2016) … Continued READ MORE
Living standards· Monetary policy· Macroeconomic policy The rate rise debate should prompt wider questions about the living standards impact of monetary policy 1 November 2017 by Torsten Bell Tomorrow the Bank of England is expected to raise interest rates for the first time in a decade, kicking off the first tightening cycle for monetary policy in 14 years. Whether or not the Bank’s Monetary Policy Committee behaves as markets anticipate, the expectation has triggered two big questions. First there is the macro question … Continued READ MORE
Monetary policy· Macroeconomic policy The Bank has acted, but the real drama is yet to come 4 August 2016 by Matthew Whittaker While the time since the UK voted to leave the EU can still be measured in weeks rather than months, evidence is starting to come in on the extent to which that decision is impacting on the economy. It will be a while longer before we get hard data on output, but the picture painted … Continued READ MORE
Monetary policy· Macroeconomic policy The Bank will bring out its sledgehammer this week – but it needs to explain which nut it’s trying to crack 2 August 2016 by Torsten Bell On Thursday the Bank of England’s Monetary Policy Committee is going to act for the first time since July 2012. Expect general excitement as one part of the British state gets round to doing something big in the wake of the Brexit vote. But this excitement should be matched by realism about what the Bank … Continued READ MORE
Monetary policy On borrowed time? The need to make the most of the ‘window of opportunity’ provided by low interest rates 4 August 2015 by Matthew Whittaker 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 READ MORE
Monetary policy· Economy and public finances· Macroeconomic policy What impact will prolonged austerity have on interest rates? 3 August 2015 by Gavin Kelly 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 READ MORE
Monetary policy· Housing Households have been coping remarkably well with high housing costs, but interest rate rises lurk just around the corner 10 December 2014 by Laura Gardiner The lack of affordable housing, particularly in London and the South East, is one of Britain’s most-told misery stories. But less is known about how these challenges differ for various household types and, perhaps more importantly, how people cope with them. New research by the Resolution Foundation seeks to deal with both of these questions. … Continued READ MORE
Household debt· Monetary policy· Macroeconomic policy To avoid squeezed households struggling, we must beware of premature interest rate rises 6 August 2014 by Matthew Whittaker 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 READ MORE
Household debt· Monetary policy· Macroeconomic policy Once interest rates start rising, how can indebted households be helped through the painful transition? 24 July 2014 by 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 … Continued READ MORE
Household debt· Monetary policy The Bank’s conundrum countdown – Tightening policy in the shadow of a debt overhang 17 June 2014 by Matthew Whittaker 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 READ MORE
Household debt· Monetary policy· Wealth & assets We need to solve the mortgage problem before interest rates rise 23 May 2014 by Matthew Whittaker The question of when interest rates should begin to rise has been much-discussed in recent weeks, and after five years of sitting at the rock-bottom level of 0.5 per cent, a gradual increase is expected from next year onwards. This has implications for the UK’s 8.4 million mortgagors, one in ten of whom risk being … Continued READ MORE
Household debt· Monetary policy· Wealth & assets· Housing The end of a ‘golden era’ for mortgages 23 May 2014 by Matthew Whittaker It’s been a busy week in the world of monetary policy. On Sunday, Mark Carney said that rising house prices pose the biggest threat to economic recovery. On Tuesday, the official statistics told us what we already knew – that house prices in London are soaring, by 17 per cent year-on-year. Some homeowners are finding … Continued READ MORE
Household debt· Monetary policy· Wealth & assets· Housing The ‘mortgage prisoners’ with no escape route 22 May 2014 by Matthew Whittaker Mark Carney, the governor of the Bank of England, has made headlines after expressing concerns about the dangers of another “big debt overhang” building up as house prices continue to rise and approvals for large mortgages increase. He is right to be concerned, and his intervention is a further reminder of how we need to … Continued READ MORE
