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George Magnus on interest rates, Mark Carney, and the housing bubble

First published:, 24/01/2014

Interview by Jay Elwes

The Prospector had an in-depth chat with leading economist and author George Magnus on a wide range of domestic and global economic issues. He also shared his thoughts on the UK’s financial future. This is the first of four parts of the interview which will be published here in the coming days.

Jay Elwes: So the first question was about interest rates—do they need to rise?

George Magnus: Well I think there are obviously people with either kind of broad political interest or narrow interest, for example, those people who are concerned about people who have suffered from low interest rates – pensions for example, who would probably welcome the opportunity for interest rates to go back up again. They look at economic numbers, the labour market statistics particularly in the United Kingdom, certainly for the beginning of 2014, look on the face of it pretty strong. So I can understand why people want interest rates to go up and there is kind of important economic argument, that the cost of capital—what it costs people to borrow money, what it costs to invest—should bear some resemblance to something other than zero…“more:”