I wrote 2 weeks ago
on the storm that had been created by the Bank of England and the threat of
significant interest rate rises……simply due to their flawed system. The link is
below if you want a 2 minute reminder.
http://stevesmithlive.blogspot.co.uk/2014/01/not-interested.html
Since then, the financial world has gone a little crazy……and dare I suggest some panic has set in.
Homeowners have been rushing to change their variable rate mortgages to long term 5 year fixed rates as the real threat of interest rate rises strike fears in the pocket of many households. With 75% of all homeowners on a variable rate mortgage, this was always going to happen.
The Bank of England is firmly of the view that the UK's economic recovery will not be entrenched unless households and businesses are convinced that interest rates will remain low for months and years……brilliant. Yet, a flawed system is being used to set interest rates, which creates real panic that rises will be forthcoming shortly……catastrophic.
At best this is just another confusing contradiction……at worst it is a damn right mess with huge consequences.
Well it appears that the lobbying from all angles has been heard and a solution to fix this is not far away……and all will be revealed by the Governor (Mark Carney) tomorrow.
Don’t expect a climb down, apology or any egg wiping from faces……simply expect some ‘modifications’ to the criteria used to set interest rates. It’s action nonetheless and it should stop short term concerns which can only help the longer term recovery.
And that just leaves the ‘reputational disaster’ for Mark Carney and the Bank of England to repair!
http://stevesmithlive.blogspot.co.uk/2014/01/not-interested.html
Since then, the financial world has gone a little crazy……and dare I suggest some panic has set in.
Homeowners have been rushing to change their variable rate mortgages to long term 5 year fixed rates as the real threat of interest rate rises strike fears in the pocket of many households. With 75% of all homeowners on a variable rate mortgage, this was always going to happen.
The Bank of England is firmly of the view that the UK's economic recovery will not be entrenched unless households and businesses are convinced that interest rates will remain low for months and years……brilliant. Yet, a flawed system is being used to set interest rates, which creates real panic that rises will be forthcoming shortly……catastrophic.
At best this is just another confusing contradiction……at worst it is a damn right mess with huge consequences.
Well it appears that the lobbying from all angles has been heard and a solution to fix this is not far away……and all will be revealed by the Governor (Mark Carney) tomorrow.
Don’t expect a climb down, apology or any egg wiping from faces……simply expect some ‘modifications’ to the criteria used to set interest rates. It’s action nonetheless and it should stop short term concerns which can only help the longer term recovery.
And that just leaves the ‘reputational disaster’ for Mark Carney and the Bank of England to repair!
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