The Spectator

Letters: What happens if interest rates rise?

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Spinning plates

Sir: Kate Andrews is right to highlight the looming risk of inflation (‘Rishi’s nightmare’, 6 March), but to say that the UK has known barely any inflation for almost a generation misses a very painful point. It may be true for consumer prices. Low interest rates and quantitative easing, along with other ill-advised stimuli, have caused huge inflation over the past two decades in the single greatest expense throughout most working people’s lives: the cost of housing. Along with rash promises such as the triple lock, it has been responsible for a vast transfer of wealth from young to old, from the less well-off to the more affluent, and unlike the 1970s and early 1980s, it has not been accompanied by rampant wider inflation eroding the real-terms debt of mortgage-holders. This makes the threat of interest rate rises all the more dangerous; it is not just the public purse which is alarmingly indebted. As with all chancellors from Gordon Brown onwards, Rishi Sunak seems intent on making matters worse, with his recent attempts to keep the plates spinning with extended cuts to stamp duty, and taxpayer-backed 95 per cent mortgages.

David Brewis
Eton, Berkshire

Bad planning

Sir: There is now much talk about how the economy will bounce back and recover (‘The Covid recovery Budget’, 6 March). My greatest fear is a further impetus to housebuilding. The unprecedented building onslaught of the past ten years precipitated by David Cameron’s much maligned (quite rightly) National Planning Policy Framework hugely emasculated the planning defences, and is disfiguring our towns, villages and countryside. To save further fields, councils allow high density developments. A greenfield is replaced with an urban sprawl. No back gardens, no trees. Residents are powerless, as indeed are councils, to halt this. The character of England is being lost. Most bad policy can be reversed, but you can’t unbuild houses.

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