The current inflation is nothing to do with rates though. This normal historical rate you speak off is from a different era.Yes, and those people who are feeling the pinch now are going to be feeling it even more the longer interest rates remain low against imported inflation.
The bottom line is that low interest rates are unsustainable. They are anything but normal, and rates at circa 5% is about right when looking at things over the decades on an average basis
The problem basically is that some people have been hooked on cheap credit for the past 15 years, and many of those people are fairly young who probably don't/didn't know that rates below 1% are not normal nor healthy.
I'm sorry that people are going to lose their homes - i've seen this before in the 80's and 90's and it's not pretty. Many people will be on a decent fix though so the widespread immediate damage will be limited, but again, as the months go on, rates are only going to increase further so I would hope that those on fixes are getting their finances in order NOW. I suspect they won't however because they'll be paying more for food, fuel and energy in the interim, and probably looking at job losses the more inflation climbs.
Think for a moment on how things would have been in the last decade or so with high interest rates. You might be thinking well if rates were 5% house prices would be much lower as no one could afford to buy at 5%, but people still need somewhere to live so instead we just would have had the houses owned by far fewer people with many more private renting.
Are you one of those who thinks everyone should save up for everything they buy, borrowing should be expensive and the wealthy should have a nice easy way to profit from cash sitting in a bank?
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