Further to my recent article about 8% interest rates being talked up by a story drought riven media, it seems that further "silliness" abounds; there is now talk about 14% mortgage rates within two years.
Darren Cook, of Moneyfacts, is quoted in The Telegraph (which should know better than to spread nonsense like this):
"It is unlikely that the banks will have fully repaired their balance sheets before 2012 and even more likely that some of the banks will have not repaid their debt to the taxpayer. If this warning of a Bank Rate at 8 per cent does materialize and banks retain large margins on lending, it will not be a surprise to see mortgage rates go up to 12 or 14 per cent.
I would hate to think what overdraft, credit cards and personal loan interest rates will look like at the same time."
Interest rates will not hit 8% in two years...PERIOD!
The economy is fucked, and will remain weak for some considerable period of time.
This is a scare story being whipped up by the media, who have nothing else to write about.