The sharp decline in interest rates.
Interest rates peaked in 1990 when the UK was fighting to stay in the ERM and keep the value of the Pound fixed. The combination of high interest rates and strong pound reduced the inflation, created by the Lawson boom, but, also caused a deep recession.
After the UK left the [...]
The Bank of England face a dilemma over the future of interest rates in the economy.
On the one hand the slowdown in the Housing market could lead to a wider economic slow and possible recession. On the over hand inflationary pressures are actually rising, due to a variety of cost push factors. If the bank [...]
Interest rates have a big effect on the Housing Market.
Higher interest rates increase the cost of mortgage repayments making it less attractive to buy houses.
In the UK many homeowners have a variable mortgage. This means that the cost of their mortgage is dependent on changes in the Bank of England repo rate (better known as [...]