What's in issue ten: Ending the unconventional

Issue ten of ‘INTEREST’ further highlights:

• Unconventional monetary policies such as quantitative easing have created unwelcome economic distortions, and an expectation that central bankers will step in to support financial markets above all else.
• QE was possibly a necessary response to the 2008 financial crisis but has persisted for far too long and with few obvious benefits to the real economy.
• Those with longer memories will remember that today’s rates aren’t high by historic standards. What’s changed is that ultra-loose monetary policy has inflated asset prices and forced homebuyers to borrow more.
• While the headline CPI figure rose to 2.2% in July, inflation in the services sector, which accounts for 81% of total UK economic output, remained high at 5.2%.
• Swap rates dipped considerably in the weeks leading up to the MPC’s 1 August meeting, with markets seemingly anticipating a rate cut. These reductions quickly filtered through to mortgage rates, which have fallen further in recent weeks.

Issue eleven published Friday 25 October 2024 

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