Here’s a cheery, pre-Christmas message. While many or most have predicted that interest rates might have peaked and could start to come down early next year, the CBI (Confederation of British Industry, what used, in union days, to be called the employers’ organisation) say that we have another two years of 5%+. This seems to go against many of the usual signposts, such as longer-term fixed rate mortgages and bank accounts, which indicate the feeling of those that need to make money from such things of the direction of travel. The more positive spin, I guess, is that those who make and produce things are not yet feeling negative enough to predict a recession, if the amount they have to pay on their borrowings stays high. Does it all matter? Alas, yes, in so many ways.
“Cut interest rates to prevent recession, says Institute of Economic Affairs’ SMPC”
The ‘lag’, ‘trailing leg’ or ‘long wake’ of any economic measure means that its effects are often felt long after the problem it was supposed to solve has disappeared. 2010’s ‘balancing the books within the space of one parliament’ (that went well, didn’t it?), austerity to you and me, is one example.
