Miles' view on fixed rates meets mixed reaction

In his interim report to Gordon Brown, the Chancellor of the Exchequer, Professor David Miles said there was a fixation on initial pay rates, with few considering how to manage the burden of debt in the long term. Miles said many borrowers misunderstood the risk that changing interest rates posed, and criticised lenders for subsidising new lending through higher rates for established borrowers. For lenders to supply long term mortgages effectively and competitively, Miles said there were also funding issues to be overcome, such as the availability of competitive long-term SWAP rates and t...