Monday, December 10, 2007
Interest Rates… Someone trying to understand where we are rather than another deluded forecast
We now have abundant evidence that the crisis is affecting the real economy. So we need to switch our attention from the travails of the banks and look instead at their customers. Which of them are getting hit?.. US mortgage borrowers are suffering and their UK counterparts will be shortly. But in the eurozone, consumers are less heavily indebted. And credit creation in the eurozone, on the latest October figures, is still showing strong double-digit growth. Hence the fact that the European Central Bank did not cut interest rates last week. It saw no need.