And a "record" decline in the fortunes of British families since World War II...for this reason

  High UK interest rates have led to a "record" drop in British household wealth since World War Two, but they may give a boost to those looking to buy their first home, according to a study published Monday.

Rising interest rates amid inflation since the post-Covid recovery "has reduced household wealth across Britain by £2.1 billion over the past year", according to the study by the think tank Resolution.

The center stated that Britain benefited from an “unprecedented boom in wealth in recent decades,” while the total wealth of British households rose “from 300% of national income in the 1980s to 840%, or 17,500 billion in 2021,” according to the news agency. France Press.

The center stated that "the rapid increase in interest rates by the British Central Bank since the end of 2021 led to an increase in mortgage rates and caused a decrease in housing prices, as well as the prices of British treasury bonds and companies." which specializes in anti-poverty policies.

Falling government bond prices have reduced the book value of the assets of pension funds, which are traditionally the largest source of household wealth in Britain, says the study, which was conducted in partnership with Abrdn Financial Fairness Trust.

The result: British household wealth now accounts for just 650% of Britain's national income in early 2023, the biggest drop since the end of World War Two, according to the study.

Faced with inflation stable in May at 8.7% in one year and continuing to beat expectations, the Bank of England raised interest rates in June for the 13th consecutive time to 5%, and markets expect them to peak at 6.5% in March.

This decline in British household wealth may reduce the “generational inequality” that has increased over the past 40 years, as older generations benefit from the property boom while younger people find themselves deprived of property ownership.

The constant rise in interest rates puts more pressure on the financial resources of families who have a home loan because it usually comes with variable or fixed rates for only a few years.

On the contrary, these higher rates may lower real estate prices and allow retirees to achieve a better standard of living by increasing pension fund returns, according to the study.