Base rates

handful

The current financial crisis makes no sense at all to me. 3 months ago everyone was talking about how high interest rates were (BR around 5%) and now repossessions are rising fast with BR dropping monthly. With the current borrowing plans that the government is planning to boost spending, surely all they are doing is delaying the inevitable with future significantly higher interest rates and this will coincide with higher taxes for all to pay for the current borrowing. We could be talking total collapse of the housing market if rates even go back to historical averages.

Look at the history of bank base rates here:

http://www.bankofengland.co.uk/statistics/rates/baserate.pdf

For those pondering on the FR or tracker question, having a tracker at most times since 1970 would have been expensive to say the least. 1979 stands out with 17%:eek: . Followed by 15.12% in 1981 and 14.78% in 1989. (I remember that one well) I think the reality of inflated house prices is starting to sink in.