Rates Down = Inflation Up

The Property Nomads Podcast

Rob discusses the recent decrease in interest rates by the European Central Bank and the potential upcoming decision by the Bank of England to follow suit. He delves into the implications of lowering interest rates on inflation and the economy, and highlights the historical context of inflation, the impact on housing and portfolios, and the importance of understanding macroeconomics when making financial decisions.

KEY TAKEAWAYS

• The European Central Bank and the Bank of England are likely to lower their base rates, which may lead to inflation.
• Inflation rates have been higher than the ideal 2%, despite government statistics suggesting otherwise.
• Lowering interest rates may create a false sense of security, as it could lead to another wave of inflation.
• Property investors should consider the potential impact of rising interest rates due to inflation on their portfolios.
• It is essential to study macroeconomics, assess the situation, and consult with a mortgage broker to make informed decisions about locking in interest rates.

BEST MOMENTS

"Inflation is definitely a lot higher than that. But what does that mean for housing? What does that mean for your portfolio? And it's a very good question."

"Lowering rates, people might start to think, yeah, this is very good. This is very nice. But all the underlying supply and demand challenges that we have and a big bunch of other things that are going on in the world..."

"So we're in the wave, we're at the bottom of wave one. So wave one has been undone, it's been and gone. We're now at the bottom and wave two is probably going to happen."

"If inflation does go up, then the chances are you're probably going to see your interest or the interest rate go up."

VALUABLE RESOURCES

https://www.msn.com/en-gb/money/other/new-5-000-deposit-mortgage-allows-homeowners-to-borrow-up-to-99/ar-BB1kAyPG?cvid=a8d56fce268a490ed6c3e1a701b2dae2&ocid=winp2fptaskbar&ei=5&sc=shoreline

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