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.
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