Wednesday 22 January 2014

Not INTERESTed?


Big news today on Unemployment……falling at it’s quickest rate for 17 years to 7.1%.
 
Good news right? WRONG!
 
In short, if unemployment reduces any further it will reach a level that will trigger the Bank of England raising interest rates. They told us that it wouldn’t happen until 2016……it’s taken just 5 months.
 
75% of all homeowners have a variable rate mortgage. That’s 75% of homeowners that will have to pay more for their mortgage, have less to spend and the economic recovery will stall.
 
I don’t want to say I told you so but……
 
 
If you decide to link interest rates to a measurement that isn’t correlated (unemployment), you get a problem. We now have a problem.
 
The only surprising thing is that it has happened a little sooner than we thought.
 
 

No comments:

Post a Comment