The country’s housing market could be so destabilised by rises in interest rates that the Bank of England would have to halt the process, Sushil Wadhwani, a former member of the central bank’s rate-setting monetary policy committee, cautioned.
The UK has a debt trap, Wadhwani said, questioning whether it was actually going to manage to raise interest rates very much because of a destabilising impact on the housing market, that might abort the rate-hiking cycle.
Wadhwani made the comments at Fathom Consulting’s 2017 economic outlook.
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