the fourth place

Hi,
The point you are missing is that when the base rate is under the long term average it is effectively being subsidised by the government and that in turn fuels borrowing.

Right now, people have massive financial problems but rates are not really high at all, they are actually pretty neutral but the previous subsidised low rates led to excessive borrowing where now, even a 25bp rise causes problems.

UKIP is not proposing the French approach, we as members, were simply discussing how other countries stop the escalation of excessive debt.

This has all been caused by the BoE being asked to manage a meaninless inflation target, the cpi which is a european measure for a largely renting culture, when in the UK, with our high home-ownership, the BoE target should include mortgage costs (as we used to, the RPI until ditched by Brown), or preferably house-price inflation itself.

As a solution, I prefer simply adding house-price inflation into the managed inflation target (but first massively opening up supply by loosening planning laws), as this currently ignores the one payment that makes up about 82% of the total.