Great as usual, adding to the mortgage channel you also have big corp debt rollovers (the market based finance figures are quite scary for 25/26)
Adding a challenge to forecasting the outlook are the HH level differences in debt vs savings (the core of the rate hikes are stimulative arg I am v much against). Around 40% of HHs are home owners mortgage free, so will not be a victim of rollovers/haven’t been hit by cuts at all, whereas those that are going to get hit will get hit quite hard. On a non mon pol note, another terrible hit for wealth inequality!
Thanks, James: excellent points both on corporate debt rollovers and ownership. In some ways given the transmission mechanism, the significant increase in interest rates in the UK could amplify inequality.
Great as usual, adding to the mortgage channel you also have big corp debt rollovers (the market based finance figures are quite scary for 25/26)
Adding a challenge to forecasting the outlook are the HH level differences in debt vs savings (the core of the rate hikes are stimulative arg I am v much against). Around 40% of HHs are home owners mortgage free, so will not be a victim of rollovers/haven’t been hit by cuts at all, whereas those that are going to get hit will get hit quite hard. On a non mon pol note, another terrible hit for wealth inequality!
Thanks, James: excellent points both on corporate debt rollovers and ownership. In some ways given the transmission mechanism, the significant increase in interest rates in the UK could amplify inequality.