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This year could well be another bumpy ride and rising inflation brings the prospect of interest rates on an upward trend. Apparently banks are removing fixed and tracker rate mortgages so a sure sign something is on the cards.
Personally I had been sure December would see a rise in interest rates at the latest because of inflationary pressures in the economy but the fragility of the markets and personal finances put this off. However with CPI running at 3.7% and RPI around 5% this cannot be ignored for long.
Of course the fragility has not disappeared and the consequences could take us into a whole new chapter of problems and the prospect of the double dip recession.
I always struggled with economics at University, the basis of arguing black is white and up is down and whatever you say there is no answer and you really can’t be wrong. When you are wrong then it is a something else that caused a change that made it wrong.
So while the professional economists will argue and debate on which way is up and the right and wrong solution; it is evident that we are in unchartered waters and for which staying alert is the only option and mapping where we have been to avoid the perils again.
My real fear is that we won’t learn from what has happened and the same mistakes will be repeated.
As Ricky Tomlinson in The Royle Family might say “end to boom and bust, my …..!”
19 Jan 2011 09:34:32