Rocketing Interest Rates???

Posted:Abigail Andrews - Sunday, March 9th, 2008 at 4:43 pm.

We keep on hearing it one the news, we see it in articles in the papers and on the internet; the property market is crashing apparently? What's more, if the media scare mongering is to be believed we will all lose all our money and may as well kill ourselves now! The end of the world is nigh!!! Here is my rant.........

While watching a BBC News programme one morning about the current slow down in the UK housing market, I heard one of the most amazingly incorrect statements from a reporter that I have had the misfortune to witness. I quote, "as interest rates are rocketing!" What? When did that happen? Oh yes, now I remember, that was back in 1988, but no, scarily the journalist was reporting on current interest rates and even more scarily it was only days after the Bank of England had cut them!! Wow, I thought in amazement, how irresponsible can journalists be! I began to think maybe I had misheard, but in watching the rest of the news item I was astonished to realise that I hadn't.

Maybe I missed something? Did I fall into a coma? Did I lose a few years of my life? Is it still 2008? Or have I fallen asleep for a very long time and only just woken up having missed the "rocketing interest rates"???? Nope, I didn't miss anything, its still 2008 and I know that interest rates have not rocketed for a very long time......... that is unless you call the latest high of 5.75% and the current downward trend - "rocketing". I know I don't!

What should be pointed out is that interest rates are still well below the 20 year average. If you don't believe me please follow this link and take a glance : BEO official Bank Rate history. As you can see, back in 1993 interest rates were about the same as they are now. We had a bit of a peak of 7.50% in 1998, where I could perhaps have understood the term "rocketing" being used. However, since approx 1993 I would say interest rates have been pretty much stable, that is if you compare it with the run up to the massive 16% seen in 1983! Now that's when Interest rates "rocketed!" in my opinion.

Bear with me, my rant is nearly over......... :)

What on earth were the BBC thinking airing an article with a statement in like that? I mean, its obvious it must have been filmed before the interest rate cut, but how irresponsible is it to let it be broadcast with a completely incorrect statement in it! We should realise that journalism like that can damage our economy and actually influence what eventually happens to interest rates, inflation, and our countries economic health! It could perhaps influence the chance of us seeing "rocketing interest rates" in the near future; surely, such irresponsible journalism should not be allowed to be broadcast? Just from seeing one report, from one journalist, many a misunderstanding person can be sent into a spin, worrying that interest rates are "rocketing" when the reverse is in fact true!

Ok, final thought, its not interest rates that are rocketing....it's perhaps rocketing inflation that we should be reporting on and worried about. The cost of living "seems" to be flying up, although apparently the Bank of England have it all under control, and inflation stands at approx 2.2 at the time of writing this article. Leading me nicely onto another rant topic........................ please come back for more :)

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