Vastly divergent policies from global central banks have sparked investor concern that 2015 is set to be a turbulent year, as the Bank of England (BoE) details the dangers that an interest rate rise poses for the nation’s housing market.
“Next year is going to be massively volatile because you’ve got all the major central banks doing things they don’t really know how to do,” Peter Sullivan, head of European equities at HSBC, told CNBC Monday.
The U.S. Federal Reserve and the BoE are on course to raise their main interest rates from record lows either next year or at the beginning of 2016. This is in contrast to the euro zone and Japan, where key interest rates are likely to remain low for the next few years.
Interest rates – which are benchmarks for all sorts of mortgages and loans – were cut after the global financial crash of 2008 in the hope of stimulating lending. However, with both the U.K. and U.S. economies seeing better growth and falls in unemployment levels, expectations are high that there will be a change in policy in the near future.
via CNBC
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