2007 Predictions?

Well, we're talking averages. So if it makes sense to spread the total debt over the whole population (what was it, about £1.2 trillion representing about £20k per person?), then it also makes sense to spread the debt written-off across the whole population at least of borrowers, on the grounds that the losses which this writing-off represents to lenders as a whole must filter through to the interest rates they charge everyone.

OK, it doesn't necessarily make sense to spread the total debt over the whole population, but only over the population of borrowers, so if only (say) half the population are lumbered with mortgage debt (and the rest either rent or have paid their loans off), then you simply spread it more thickly, i.e. the write-off in effect costs every average borrower double the above £23 (times the number of people in their household divided by the number of borrowers in it).

'morning Terry and a happy new year.

They were strange times as there was also Lawson currency 'fix' at 3 deutschmarks in 1987 to bypass Thatchers refusal to join the ERM. The policy was ended after a year in early 1988.

The real base rate was reduced from 6.9% to 5.4%, base rates from

10.9% to 8.9%, and inflation from 4% to 3.5%. He appeared to think that he'd got inflation beat and was relaxing policy too soon. However he may have been caught between a rock and a hard place of a schizophrenic economy at that point as GDP growth went from 5% to 2.2% over the next year.

Methinks that the seeds were sown earlier by an economy straining at capacity limits.

Daytona

So it was nothing to do with 15.5% interest rates and the ERM then?

But what about the total *assets*?

agrees with the £1.2 Trillion debt, but and mentions £6 trillion of assets ("*net* assets" in the case of the second link) , including £3.59 of property... might be worth bookmarking. rgds, Alan

Reciprocated.

As far as housing prices were concerned, it was very obvious that the driving force behind the rush of the gadarene swine was the termination of multiple MIRAS entitlements. There were, as you say, other contributory factors.

Not directly, no. The refusal of the Bundesbank to take any action to prevent its currency growing in value out of control, perhaps.