And as we expect the economy to strengthen further over the forecast horizon, increasing interest rates are likely to coincide with a robust macroeconomic environment. This means that they will help curbing sharp increases in house prices. Nevertheless, we will continue to watch out for economic and financial risks that may materialise.
This may be relevant if we experience abrupt changes to interest rates or asset prices. Slide 26: Rising house prices – but no bubble An environment of very low interest rates increases the risk of asset price bubbles. And the low interest-rate environment has indeed caused realestate prices to rise. In particular, house prices in and around Copenhagen should be monitored carefully.