Policy Research in Macroeconomics

If interest rates rise “God help us all with mortgages”

…said PRIME Economics director Ann Pettifor in a debate with Fraser Nelson of the Spectator on the BBC´s Daily Politics programme on 24th June, 2014. Even a gradual rise in the bank´s base rate would put around 2.3 million households at risk. Marginal increases in household incomes make debtors highly vulnerable to any additional borrowing costs. Pettifor also said that a rise in rates would be particularly harmful for those on low incomes that had been actively encouraged to take out high loan-to-value mortgages by the government’s Help to Buy scheme. Watch the full interview on BBC.

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