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House Price Crash Forum

Gordon Brown's Legacy

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Guest muttley


The simple truth is that this decade of debt has, in part, been caused by the Bank of England's very independence. By keeping interest rates so low, the monetary policy committee fuelled this debt explosion, and caused a massive house price boom.

Brown has come in for a lot of stick in the Telegraph lately.

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Guest Charlie The Tramp
Many economists are sanguine, claiming low interest rates are here to stay. They argue that inflation targeting in the UK and Europe - and possibly soon the US - has closed the door on the days of high borrowing costs.

Others are less certain. They fear a global economic catastrophe, such as a collapse in the dollar, could re-ignite inflationary pressures.

John Butler, UK economist at HSBC, says: "I think the debt issue is a problem. It makes the consumer and the economy much more sensitive to shocks".

The same sentiments as The Reserve Bank of Australia published September 2005. ;)

FURTHER rises in oil prices, the collapse of a major bank or an unexpected jump in inflation could be all it takes to send the increasingly fragile global financial system into meltdown.

The Reserve Bank of Australia warned yesterday that the current calm in financial markets could be the prelude to a storm that could wreak havoc in the world economy.

The RBA believes the boom in markets for shares, bonds and housing in many countries is unsustainable.

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