Rogoff: Rising interest rates ‘threaten global economy’


A unannounced rise in interest rates poses the greatest threat to the global succinctness, the IMF’s former chief economist has told the BBC.

Ken Rogoff, who famously predicted a big bank order collapse during the financial crisis, warned that people had got second-hand to ultra-low interest rates.

He also said the economic policies of the Trump oversight posed a risk.

Previously the economist had said China was the number one presage.

Talking to the BBC’s World at One Mr Rogoff said that levels of personal and corporate indebted had risen in the global economy.

‘Start to unravel’

This was while avail rates had been held at historic lows in many countries, to abet investors to borrow and spend after the financial crisis.

«If something was to upon that pushes interest rates up, we could see a lot of soft spots — deposits where there is high debt — start to unravel,» Mr Rogoff remarked.

He also said that the economic policies of the White House were initiating uncertainty, without naming specific policies.

President Donald Trump is pursuing a various protectionist trade agenda and trying to relax regulations brought in to screen the financial system after the crash.

He has also pledged to slash weigh downs and boost infrastructure spending.

«The risk is that the White House or the US thinks fitting do something really irrational. That may seem hyperbolic but we are all holding our touch,» Mr Rogoff said.

‘Scarred generation’

He added that China, the mankind’s second largest economy, remains a threat due to its own debt problems, factional instability and dependency on exports.

Speaking ten years on from the start of the fiscal crisis, Mr Rogoff said the US had substantially recovered from the downturn of 2007-8.

But he stipulate a generation had been «scarred» by the crash and many young people had clashed to find work as a result.

«I think the crash greatly amplified this wave of populism that the period’s feeling right now,» he said.

«The US would not have had Donald Trump as president without the explode.»

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