The Downside Risks Associated With Tightening Monetary Conditions

We might be close to peak interest rates but there are lag effects associated with tightening monetary conditions. We are seeing some signs of delinquencies not so much on the household side particularly not in those countries like the US or for instance France and Germany where mortgage markets are much tied into 20, 30 year mortgages. The longer they stay high for then the more the strains are that feed through to those areas. In countries over time where refixes fall due like like the UK will see that the speed is hard to gauge given that we have an array of two year three year and five year fixes that will gradually be falling due over the course of the next few years.