The
governor of the Reserve Bank of New Zealand is Graeme Wheeler, pictured above.
Recently,
we had occasion to remark on the possibility that the Bank of England Monetary
Policy Committee (MPC), under the guidance of its governor, Mark Carney, might
feel it necessary to raise interest rates sooner than had been expected.
New
Zealand has, of course, already embarked on raising rates. It became the very
first of the developed countries to do so in the aftermath of the Global
Financial Crisis, when rates were lowered in all jurisdictions, sometimes to
levels just a little above zero percent. Will the UK be the next to join this
club?
Housing seems to be key
One
of the big worries for all central banks is the danger of a residential
property bubble, brought about by those same low interest rates.
Yesterday
the Bank of England announced curbs on lending for housing, the so-called macro
prudential measures, which limit loan to value criteria, among other things.
Here’s
the thing: New Zealand also led the world in this type of measure, some time
before it started to raise rates. Is there a pattern here? Will the UK be the
next developed economy to tighten?
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