Interest rates are now expected to rise to 6% next year, far above the 1.5% rate projected just months ago
By August traders in money markets were betting on rates hitting 2.75% next year. Then, after Liz Truss took office, the expected peak rose to 4.7%. Today, in the wake of Friday's fiscal event, the expected peak rose to 6%.
For much of the past few generations, the average household had significantly lower mortgage debts and considerably higher incomes versus their repayments. Thus even though the nominal interest rate was exceedingly high, those mortgages were actually more affordable.
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