Today, the European economy benefits from benchmark long-term market interest rates well below 4%, a level which most issuers have never seen in the last fifty years. The reduction in risk premia and the stabilisation in inflation expectations at low levels is a major achievement which must be maintained by today’s and future economic policy making.
For those on variable rate loans, borrowers with lower incomes added $ on average to buffers in offset and redraw accounts over the past three years; this compares with the average of $ accumulated by the highest income borrowers.