The big surprise at yesterday’s annual Mansion House speech came not from the Chancellor but from Mark Carney, who suggested that the first interest rate rise since the crisis might be more imminent than widely expected and may even happen before the end of the year. While Carney’s been traditionally more forthright than Osborne about his fears of a destabilising property price bubble, he also insisted he wasn’t considering using interesting rates to control property prices. (After all, new powers granted to the Bank of England to limit loan-to-earnings ratios would help to do that.) His concern, he said, was purely household debt. However, to suggest that a rise in interest rates won’t affect homeowners is of course mis-guided. However where it’s likely have its most significant effect, is in areas that haven’t profited from rises in property values, and where employment/wages are depressed. We watch with interest, so to speak.
Technorati Tags: property, real estate