Professor Alan Ahearne:

It is very hard for me to put myself in somebody else's shoes. One of the things that was said a lot is that interest rates were low. The ECB's interest rates were 2%. They had doubled to 4%. People point out that 4% is still low. That is true but they had doubled and I think people forgot the last part of it, namely, that they had actually doubled. If one had an interest-only mortgage one's interest payments would have doubled, even though they had gone to what one might think is a low rate of 4%. If one is extremely stretched, if one has borrowed a lot of money, one would be very sensitive to that. So if I said the interest rate went from 10% to 20% one would say that was disastrous, but that is a doubling as well. So I think it was that point that people may not have appreciated fully.