Merryn Somerset Webb

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I'm Michael Easter, and on my podcast, 2%, I break down the science of mental toughness, fitness, and building resilience in our strange modern world.

Andy, let me ask you about one of your other areas of expertise, interest rates.

Now, there was an expectation before the war in Iran that rates would gradually be falling and that that would be good for all sorts of reasons, but that no longer looks like it's very likely.

Where do you see rates going from here?

And honestly, I'm asking on behalf of the property market here.

Yeah, oh, very good.

Well, look, like everyone else, my historic reputation at the start of this year

was that inflationary pressures were abating.

And they really were abating.

They'd been abating for the better part of six to nine months by the start of this year.

And if anything, I'd been a bit critical of my former employees at the Bank of England for not lowering rates faster than they had, which I thought was justifiable given that inflationary pressures had peaked out and were falling.

Now, the world has changed and we saw financial markets run very quickly to the other side of the boat with an expectation of now rate rises, not just in the UK, but in the US and the Euro area as well.

That looks to me like a very significant overcorrection.

Why do I say that?

I suspect lots of people were repeating the Ukraine-Russia playbook

And this is not that.

This differs from that in two very fundamental and significant respects.