Thursday, 7 February 2008
Mortgage bliss; Badgernomics
The Bank of England has reduced interest rates again today to 5.25%. The most interesting note that I saw on the release was that there is a high expectation, even by the Bank, that inflation will rise over the next few months; Unless there is a really severe downturn.
However, if you are a mortgage owner with years to yet until the mortgage is paid off, think how well you will be doing. Interest rates are low, meaning your payments are down, meanwhile inflation is relatively high meaning that the overall capital you owe is decreasing quite rapidly.
If you are a pensioner or saver then of course the situation of low-level stagflation is a disaster; but if you are either of those no doubt you vote Tory anyway so Brown and Badger don't care about you.
Think of all those happy people in houses with 100% mortgages benefiting instead. Makes on proud to be British, eh Gordon?
Posted by CityUnslicker