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Bank Of England Ups Interest Rates

Thursday, January 11th, 2007 at 19:12 by Simon Kimber

Economic analysts are hanging their number obsessed heads in shame this afternoon as the Bank of England stomped on their predictions that interest rates would remain unchanged until at least next month.

With a quarter of a percent rise the base rate now stands at 5.25%, the highest it’s been since July 2001, and is undoubtedly a sign of things to come.

“But we don’t need to worry!” said Gordon Brown, in a statement to the inside of his own head, ”Our economy is lovely and fluffy and cuddly and wonderful. And as for our houses, well they’re just going to keep on going up in value aren’t they?  We’re all going to be rich! That’s how things work up here in Cuckoo Land, isn’t it? Look at that lovely cloud! Gosh, it’s a bit messy in here! I’ll just brush all these repossession notices under that rug there. Ah, that’s better!”

Worryingly Gordon’s day dreams have been generally adopted by the British public and we’re not nearly as concerned as we should be about what’s going on.

Repossessions are already on the increase, with last years figures the highest in 5 years, and with further rises expected things are sure to get worse.

First time buyers already face a financial struggle. Many lenders are offering mortgages based on 5, or even 6 times income multiples, while - according to the Royal Institute of Chartered Surveyors - the up-front cost of making that first purchase is a pocket-gouging £32,788.

We have a generation of home-owners already stretched to their financial limits and the prospect of continuing rate rises that could quite realistically add a couple of hundred pounds to the average monthly mortgage repayment.  If house prices continue to rise - as predicted - and interest rates continue to rise - as predicted - the so-called “housing ladder” is in serious danger of disintegrating from the bottom up.

“But that’s OK,” thinks Gordon, as he tucks himself in with some warm milk and cookies, “I’m moving next door soon and that’s all paid for.”

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One Comment on “Bank Of England Ups Interest Rates”

  1. Sue Stewart Says:

    ??But that??s OK,? thinks Gordon, as he tucks himself in with some warm milk and cookies, ??I??m moving next door soon and that??s all paid for.?

    Ah, that’s the life.

    And those of us who can’t do that should all become travellers and go down to visit Uncle Gordon in his nice, big house, number 11. Er, number 10.

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