Tuesday, Mar 13, 2007
Interest rates should be at 8% says treasury advisor
This is London: 'Raise interest rates or face economic disaster'
House price inflation is continuing at an unsustainable rate, increasing the possibility of a crash, and endangering the livlihood of many thousands of people who count on their property as a pension. Martin Weale, director of the National institute of Economic and Social Research and advisor to the treasury, says that interest rates need to be raised to nearer 8% to make an impact on the housing market.
Posted by jellycaster @ 09:42 AM (148 views) Add Comment
10 Comments
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1. Sam said...
thsi is going to be the same article as the one from the daily mail. -- it's the same organisation.
2. C'mon Correction said...
"For two years, Mr Weale was one of the Treasury's "wise men" responsible for setting interest rates before the Monetary Policy Committee was created in 1997.
In an exclusive interview with the Daily Mail, he said: "The UK property market, in terms of its implications for the economy as a whole, is something of a disaster. "
- Indeed. An educated person can see that this huge bubble is BAD for the economy which will impact on life whether you're a home-owner (even home-oweners of 20+ years) or not. When are people going to realise this??????
3. paul said...
Ooops. The story is gaining ground ...
4. rich said...
He also said on the Today program that he didn't expect the BoE to raise rates that high. That leaves us with the possibility that rates will remain low and inflation will be allowed to continue.
5. Geneer said...
Can't help wondering if its a backhanded way of saying - don't worry interest rates will never go high enough to effect HPI.
But now before its too late. Its a new paradigm...etc..etc
6. bidin'matime said...
"The Treasury responded to his warning by claiming that the decline in savings is a result of economic stability."
Are we all living in Alice's Wonderland now??!
I heard the interview as well and felt that the question that remained unasked was 'If you think that the MPC will not raise rates as you suggest they should, what do you think will be the eventual result?' I suspect that the interviewer feared the answer too much to ask the question...
7. lvmreader said...
So let me get this straight, "In a STABLE economy, people have less savings than in an unstable one?"
8. mrmickey said...
Yep everything is so great that you don't need savings for that rainy day becasuse it's sunshine from now on.
9. Cstanhope707 said...
Interest Rates are only part of the Solution after the eventual crash the backward system of buying and selling properties in this country needs reform I am going to propose the following idea to my local MP, he won't listen but still largly based on the Australian system, I would also be interseted to here other peoples thoughts on the.
1) Once an offer is accepted no party can pull out buyer or seller accept for very rare situations such as long term disability etc.
2) Gazumping is illegal.
3) In return the buyer puts a deposit into a trust account, this goes towards the purchase price of the property. If the buyer pulls out for no valid reason the seller gets the cash.
Winners
Buyers and sellers, no farcing around etc etc.
Loosers
Estate agents, Solicitors, Speculators
10. lvmreader said...
"In defence of currency........."
We'll be lucky to get away with just 8%. It looks more like 15% to save Sterling from imminent collapse.