Households coping with ‘peak’ ache from rates of interest, says Bank of England official

Consumers are coping with the worst of the affect of excessive rates of interest proper now, a Bank of England deputy governor has stated.

Sir Dave Ramsden stated that 15-year excessive rates of interest of 5.25pc would ship the “peak impact on growth” over the last three months of this yr.

Although he acknowledged there may be “significant uncertainty” round his estimates, Sir Dave stated the financial system would “continue to flat-line through to the end of 2024”.

However, he stated he was “more confident” in regards to the outlook for the financial system past the following few months.

It comes as official figures confirmed retail gross sales unexpectedly slumped in October. 

Meanwhile, lender Nationwide revealed that mortgage arrears started to tick up within the six months to September.

Sir Dave informed enterprise leaders on the Society of Professional Economists Annual Conference: “Based on the average relationships over the past between Bank Rate, other financial instruments and economic activity, Bank staff estimate that more than half of the domestic impact of higher interest rates on the level of GDP is still to come through, with the peak impact on growth around the current quarter, although there is significant uncertainty around those estimates.”

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