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Debate House Prices

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Base rate could be at 0.5% untill the end of 2011

Interest rates are likely to remain lower for longer than the markets expect. Even assuming Bank Rate at 0.5 percent until the end of 2011, the bank expects inflation to undershoot the target rate until the final quarter of 2011 (again, excluding the VAT spike).

Looks like we are going to be doing a long payback rather than high inflation to "downsize" the debt.

It will be interesting to see what this does. Good and bad, debt will remain fairly cheap to service but this also indicates low/negative inflation. This will mean wages will remain fairly static at best.


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