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Carney Sees Interest Rate Rise In 'relatively Near Term'

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mikey4444 | 10:43 Fri 29th Sep 2017 | News
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http://www.bbc.co.uk/news/business-41439349

I heard the Carney/Humphrys live this morning. Carney is a very urbane character and if interest rates DO rise in a few weeks, I would be at all surprised.
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Do you mean you would NOT be at all surprised, Mikey?

Yes, they need to rise, and not but the piffling 0.25% that is likely. The medium to long term effects of ultra-low interest rates for ten years are yet to be felt. But they will hopefully be less catastrophic than I imagine. Personal debt has reached ridiculous levels with people running up loans, especially for "big ticket" items such as cars and houses, that in normal market conditions they would never be able to afford. Because of the difficulties they will face interest rates rises will have to be curbed and will not be able to return to the necessary levels quickly, if at all. This means people will not be weaned off cheap money which, in turn, will make it ever more difficult to return rates to the levels necessary for a properly functioning economy. The policy of "emergency" ultra-low interest rates was a folly of the first order. All it did was to "boost" the economy by encouraging people to take loans they could not afford to repay in normal circumstances. And that's what caused the financial crisis they were introduced to address in the first place.
Bring it on!
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Yes NJ...typo on my part !

I suspect that he will indeed raise rates soon, but it will only be by a modest amount. He won't want to know for starting a new recession, especially now in the evening of his career.

I am as worried as you are about the increase in personal debt. But the effect on mortgages if interest rates were to be raised to the kind of levels that I remember when I first bought my home in 1980. are too horrifying to even think about.

My mortgage rate at the time was 15% !
Well let's hope it's true. It could do with changing from "unfindable" to "pathetic" as the first step in a morally correct direction. Maybe then savers generally, and pensioners trying to live on savings, will be less robbed.
Ah I recall those times. I started my first mortgage in 1978. But I reckoned it was a not unreasonable price to pay to hire the money for my home. Cheaper money hire adds to more money available to bid with, and thus higher property prices. Part of today's housing problem.
I'm struggling with the link between Mr Carney's suave demeanour and his financial expertise. He's been in the job long enough now to do something other than charm the country with a half smile and an expensive manicure.
Maybe you could expand, Mikey.
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Expand on what Dougie ?

He served as the Governor of the Bank of Canada from 2008 until 2013.

Also, he was appointed, in 2012, by George Osborne, a somewhat forgotten figure now, who was the Tory Chancellor of the Exchequer at the time.

Not sure if that helps your query ?

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