When will interest rates return to normal?

Krakkkers

Normal is 6% to 7% .

Albermarle

People simply have far too much debt - we saw it at the start of Covid where people unexpectedly lost their jobs and were suddenly unable to make their monthly payments for their iPhone, internet, Netflix, Sky, car, clothes bought on credit, credit card debt. The list is endless as absolutely everything seems to be on credit these days. All very different to when/how I was brought up - if you can't afford to pay for it, you can't have it. Simples

Although in the 60's and 70's many items were bought with I think what were called Hire Purchase schemes> My parents referred to people buying things on the 'never never' . TV's , washing machines etc. 

Obviously though nowadays, there are more 'essential items' and it is easier to get credit.

eskbanker

Krakkkers said:

Normal is 6% to 7% .

By what definition?  As per the chart posted on the previous page, it's only briefly spent time within that range during the last fifty years....

Krakkkers

eskbanker said:

Krakkkers said:

Normal is 6% to 7% .

By what definition?  As per the chart posted on the previous page, it's only briefly spent time within that range during the last fifty years....

But a lot of time over it, average??????????????

masonic

Krakkkers said:

eskbanker said:

Krakkkers said:

Normal is 6% to 7% .

By what definition?  As per the chart posted on the previous page, it's only briefly spent time within that range during the last fifty years....

But a lot of time over it, average??????????????

If going back as far as the 70s, the mean is about 6.3% and the variance is about +/- 5%

Qyburn

I still have our first mortgage offer from 1985.  Interest rate was 14.75%

eskbanker

Krakkkers said:

eskbanker said:

Krakkkers said:

Normal is 6% to 7% .

By what definition?  As per the chart posted on the previous page, it's only briefly spent time within that range during the last fifty years....

But a lot of time over it, average??????????????

Yes, a lot of time over it and a lot of time under it, but that doesn't make it 'normal', in fact quite the opposite.  Even if it's the mathematical average, that doesn't really help - in mathematical terms, the average person has one breast and one testicle but that could hardly be described as normal!

ProDave

Interest rates have been at artificially low rates for nearly 2 decades, they still have some way to rise to get back to normal levels.

Krakkkers

eskbanker said:

Krakkkers said:

eskbanker said:

Krakkkers said:

Normal is 6% to 7% .

By what definition?  As per the chart posted on the previous page, it's only briefly spent time within that range during the last fifty years....

But a lot of time over it, average??????????????

Yes, a lot of time over it and a lot of time under it, but that doesn't make it 'normal', in fact quite the opposite.  Even if it's the mathematical average, that doesn't really help - in mathematical terms, the average person has one breast and one testicle but that could hardly be described as normal!

Then define normal if you don't like the answer. Mean, modal, average, normal.

kuratowski

Krakkkers said:

Normal is 6% to 7% .

There's an argument to be made that higher rates than that could be needed, if we are to stamp out the highest inflation since the 1980s.