It is the two fixed mortgage rates that are climbing and there can only be one reason for this. That is within the term of the fix the banks expect the current run of interest rates to end and for them to be significantly higher at the end of the fix than they are now.

Two possible reason for this are:

a) the current doom and gloom is overdone and within the next few months the economy turns up rather than down.

b) Rising inflation and a collapsing pound forces the bank to raise interest rates despite the economy being in or near resession. The Richard scenario.

At present I cannot make any sense of all the conflicting views and evidence, so any UK investments I made now would be little more than a punt on reason a. For that reason, I don't think I will be investing in the UK for at least a year or two.

Regards

Alan

Hi

Anyone out there affected - or likely to be affected - by this from today's Telegraph?

'Buy-to-let landlords will have to raid their savings and inject extra capital into their homes, under an obscure clause in their mortgage contracts, if house prices continue to fall.'

http: / /www .telegraph .co .uk /money /main .jhtml?xml= /money /2008 /04 /14 /cnmortgage114 .xml