It led us into the credit crunch and it should lead us out, but sadly our banks are tied up in this whole European mess.
I remember in the early 2000s, clients insisting on trackers as “rates will drop when we join the Euro”. Thank goodness that never happened.
Since August last year we have come to see what a dreadful state the whole of Europe is in. It is now starting to really affect UK lending, especially in the last couple of months.
In fact, for all their excuses, the cause of the withdrawal of interest only lies at the feet of European problems and dodgy balance sheets.
So how will it all end up?
What we are experiencing is a very long game of political brinkmanship by the leading European countries. The longer you can play this game, the more you stand to win (or at least the less you stand to lose).
Disaster is always averted at the last possible moment – expect this to continue. Right now, the whole Eurozone is living on a prayer.
We’ll bumble along with crises and rescues, one after another, until eventually we achieve a worldwide recovery. This will happen when the USA, inflation and time itself has done its bit, and we’ll suddenly wake up to realise we made it…
If you can envisage that time, then you know what you have to do to make it. This is the time to be planning for the recovery, even if it still feels a little distant.
We might even see rising interest rates sooner then we think. That will mark a time when the broker community really gets some power back.
Dominic Hennessy is principal at mortgage advice firm Just Us Financial Solutions