The end of a twelve-year era is over. Super low rates of interest and money creating quantitative easing are history. Thank the Lord for that. Yes, painful for the non-acknowledgers of rainy days but essential to stem the demon of inflation. Can we please return to efficiency? Can we please cease artificial manipulation of normal market constraints? Look what’s happened to % interest rates,
- US Fed 0.25 to 4.5
- UK B of E 0.1 to 3.5 (and more to come)
- Europe 0.5 to 2.0 (always behind the 8-ball)
Is this surprising or a return to sanity? On 7th October 2008 – the start of my Credit Crunch Diary – the UK bank rate was 5%. Inflation was 4.5%. So,12 to 14 years of what?