By Rab Bruce’s Spider

It’s been a while since we looked at the European Central Bank’s table of long term interest rates. Pretty boring stuff for most of us, but one thing worth remembering is highlighted by the latest update to this information which can be viewed at:-

https://www.ecb.europa.eu/stats/money/long/html/index.en.html

Take a look at the UK’s interest rates over the past year or so. These are the rates at which the UK Government could issue long term Bonds, the rate indicating how much investors would receive for their ten year investment. You’ll see that the rate varies pretty much every month and the range for the UK has been as low as 1.21% and as high as 2.31%. That’s a swing of 1.1%.

Now cast your mind back to the IndieRef and remember how we were assured that, because of the black hole in Scotland’s economy (which, of course, bears no resemblance to the efficiently managed deficit of the UK) Scotland could be obliged to pay as much as an extra 0.5% for its borrowing on the international money market and that this would result in the cost of our mortgages increasing. Now, if that claim were true, don’t you think the cost of UK mortgages would have varied over the past fifteen months in line with the changes of over 1% to the UK’s long term interest rates? That seems logical but, as you will be well aware, no such thing has happened. This is because, although most Banks do obtain some of their funding via the money markets, the rates on domestic borrowing are determined by reference to the Bank of England’s Base Rate which hasn’t altered for several years. That’s because the Bank of England takes into account a range of economic factors such as unemployment figures and inflation rates when deciding whether to adjust Base Rate.

So, while it is possible that mortgages in an independent Scotland might become more expensive, this would be in response to the base Rate fixed by Scotland’s Central Bank which would be determined by a number of economic factors, not solely by the rate at which the Scottish Government could borrow.

Please keep this in mind the next time some Unionist commentator or politician insists that Scottish mortgages or credit cards would be more expensive solely as a result of long term rates on the international money markets. Like so many other Better Together claims, that was an outright lie and the ECB has provided the proof of that.