We have lived, for a long time now, in an environment of very low interest rates across the world.  This obviously followed the 2008 financial disaster that saw markets slump and governments dropping interest rates to try and boost the economy.  It has always been a question of when the rates would go up, and in America the hints have seem to be that one would be looking at interest rate increases early next year, but minutes of the meetings of the various countries controlling interest rates in various European countries, seem to indicate that the rates might rise even faster there.  Our interest rates are naturally typically higher than overseas countries, but when they do raise their rates, and one would imagine there will be a series of smaller, incremental rates, that will lead to our rates rising as well.  That affects people badly if they have debt on motorcars or houses, but obviously old-age pensioners for example then get more interest on their money and that helps them in their retirement.  

High interest rates helped me purchase my first house in Parkhurst, because although people forget now how quickly rates can rise, they rose to about 28% at one time, just when I was in the market for buying a property and as a result of those high interest rates, the property prices had slumped.  Shortly after I bought, the rates started going down dramatically and that led to house prices going up – so, the timing was very good for me, at that time, and allowed me to get a house for far cheaper than I would have one or two years earlier.  The main lesson to be learned is that rates always go up and they always go down, and if you borrow money at the lowest rates, and one must certainly be aware that one has been borrowing at the lowest rates, for example over the last five years, that you have enough money to pay off those loans when the rates increase.  Hopefully of course we will never see that 28% type rate again!