Interest rates going up soon...
Discussion
BlackLabel said:
" David Cameron has said it would be "lovely" for interest rates to remain at historic lows "forever" because it will allow families “to buy the homes they can afford”.
Completely missing the point that if you lower the cost of borrowing by 20% then house prices go up by a commensurate amount. People spend what they can afford. Double the amount they can spend and you just double house prices, not make anything cheaper.So what he really means is 'It would be "lovely" for interest rates to remain at historic lows "forever" because it will allow families “to keep paying ridiculous amounts of money for a home”.
BlackLabel said:
" David Cameron has said it would be "lovely" for interest rates to remain at historic lows "forever" because it will allow families “to buy the homes they can afford”.
The Prime Minister said that Britain’s low interest rates are “good news” because it has made owning a home more affordable.
He agreed with a voter who told him that a rise in rates could make life “very hard” for homeowners. "
http://www.telegraph.co.uk/finance/personalfinance...
There's no longer any need for secret memos to the independent BoE committee which acts independently The Prime Minister said that Britain’s low interest rates are “good news” because it has made owning a home more affordable.
He agreed with a voter who told him that a rise in rates could make life “very hard” for homeowners. "
http://www.telegraph.co.uk/finance/personalfinance...
Looks like Japan is going all QE, blazing for inflation so they can both deflate their debt, and then service it with stimulated economic growth that will allow their populace topay.
Deflate the debt with inflation.
Those old war debts we're now repaying look tiny because of inflation.
But the risk is borrowing TOO much, once you've done that there is no return... even QE doesn't appear to work. If you borrow too much, even printing money will stall inflation and then you're boned.
You're doubly boned if the world has run out of fun exciting growth things, like industrialisation.
My 2p, the world is fooked. Fiat currency is about to fall on it's arse.
Stock up on your baked beans!
Deflate the debt with inflation.
Those old war debts we're now repaying look tiny because of inflation.
But the risk is borrowing TOO much, once you've done that there is no return... even QE doesn't appear to work. If you borrow too much, even printing money will stall inflation and then you're boned.
You're doubly boned if the world has run out of fun exciting growth things, like industrialisation.
My 2p, the world is fooked. Fiat currency is about to fall on it's arse.
Stock up on your baked beans!
loafer123 said:
Just a bit of soft management of the change rate to alleviate exchange rate driven inflation, and done well IMO.
Even if rates do increase, we are still talking about 0.5%.
Hopefully those who are vulnerable to interest rates rises will lock themselves in for a long term low fixed rate. In doing so only those who are happy to take risks or are financially comfortable enough to absorb increases. Even if rates do increase, we are still talking about 0.5%.
I do wonder if now is a smart time to lock into a low 1-1.5% 5year fixed rate. I doubt there would be much potential saving from going shorter term vs the comfort given what might be a challenging time with BREXIT.
Welshbeef said:
Hopefully those who are vulnerable to interest rates rises will lock themselves in for a long term low fixed rate. In doing so only those who are happy to take risks or are financially comfortable enough to absorb increases.
I do wonder if now is a smart time to lock into a low 1-1.5% 5year fixed rate. I doubt there would be much potential saving from going shorter term vs the comfort given what might be a challenging time with BREXIT.
I have 18 mths to go on a fixed rate but, if I didn't, I would be fixing long term now, no question.I do wonder if now is a smart time to lock into a low 1-1.5% 5year fixed rate. I doubt there would be much potential saving from going shorter term vs the comfort given what might be a challenging time with BREXIT.
Good news for many people who are more inclined to save and spend conservatively rather than splurging it all on credit/debt.
Been waiting for an interest rate rise for a long time.
If pound jumps at the hint of a rise, then it will jump a lot when the rise is officially announced.
Cheaper holidays for the coming years
and should also put a halt to the asset bubble that is currently taking place here in the UK.
The only problem maybe that a higher rate pound would slow trade incoming to the UK when we Brexit.
Been waiting for an interest rate rise for a long time.
If pound jumps at the hint of a rise, then it will jump a lot when the rise is officially announced.
Cheaper holidays for the coming years
and should also put a halt to the asset bubble that is currently taking place here in the UK.The only problem maybe that a higher rate pound would slow trade incoming to the UK when we Brexit.
Atomic12C said:
Good news for many people who are more inclined to save and spend conservatively rather than splurging it all on credit/debt.
Been waiting for an interest rate rise for a long time.
If pound jumps at the hint of a rise, then it will jump a lot when the rise is officially announced.
Cheaper holidays for the coming years and should also put a halt to the asset bubble that is currently taking place here in the UK.
The only problem maybe that a higher rate pound would slow trade incoming to the UK when we Brexit.
Just checked and currently £1= $1.34 & £1= 1.12euroBeen waiting for an interest rate rise for a long time.
If pound jumps at the hint of a rise, then it will jump a lot when the rise is officially announced.
Cheaper holidays for the coming years
and should also put a halt to the asset bubble that is currently taking place here in the UK.The only problem maybe that a higher rate pound would slow trade incoming to the UK when we Brexit.
Welshbeef said:
Hopefully those who are vulnerable to interest rates rises will lock themselves in for a long term low fixed rate. In doing so only those who are happy to take risks or are financially comfortable enough to absorb increases.
I do wonder if now is a smart time to lock into a low 1-1.5% 5year fixed rate. I doubt there would be much potential saving from going shorter term vs the comfort given what might be a challenging time with BREXIT.
It's what I've just done although at a touch more than 1.5% interest rates will be higher in 5 years but how much higher? It will be a very slow increase. I do wonder if now is a smart time to lock into a low 1-1.5% 5year fixed rate. I doubt there would be much potential saving from going shorter term vs the comfort given what might be a challenging time with BREXIT.
BoRED S2upid said:
It's what I've just done although at a touch more than 1.5% interest rates will be higher in 5 years but how much higher? It will be a very slow increase.
At these levels frankly there is so little to lose it's a no brainer really. I still wonder at what price does the 10year fixed rate become a very smart buy. Aware circumstances change but as long as the Early repayment charge isn't too steep it could make a lot of sense to a segment of the mortgage market.
This thread has been going 3 years 3 months, so I'll believe in a rate rise as and when it happens. My feeling is that they won't raise rates as the UK personal debt bubble is so huge that any rate rise, even 0.5% will start pushing people over the edge. Personal responsibility went out the window 15 years ago with labour, and a rate rise will stifle house price growth. Since that is included in GDP figures, the G won't want to stifle the housing boom.
If rates do go up by 0.5% it will probably trigger a long decline in house prices, as more end up in negative equity, prices stall and slide further, incurring further rate rises.
The second point is they claim it is needed to curb rampant inflation, which is above the BoE's preferred level. But there isn't the economic will to slow inflation, either. National debt is not repaid. It is eroded through inflation. A higher rate of inflation, say 4-5% for a period of 10 years will significantly erode the level of national debt.
Borrowing won't be curbed either. There was a good reason why the deficit wasn't cut as hard, and that was due to the level of toxic debt held by the banks. To increase stability within the banking sector, toxic bonds were gradually replaced with lower risk gilts, hence the high demand for gilts and government bonds. We might be borrowing billions of pounds but the rates on those bonds are pathetic. The extra £1 trillion borrowed in the last 7 years is creating stability within the banking sector as junk bonds are gradually replaced.
If rates do go up by 0.5% it will probably trigger a long decline in house prices, as more end up in negative equity, prices stall and slide further, incurring further rate rises.
The second point is they claim it is needed to curb rampant inflation, which is above the BoE's preferred level. But there isn't the economic will to slow inflation, either. National debt is not repaid. It is eroded through inflation. A higher rate of inflation, say 4-5% for a period of 10 years will significantly erode the level of national debt.
Borrowing won't be curbed either. There was a good reason why the deficit wasn't cut as hard, and that was due to the level of toxic debt held by the banks. To increase stability within the banking sector, toxic bonds were gradually replaced with lower risk gilts, hence the high demand for gilts and government bonds. We might be borrowing billions of pounds but the rates on those bonds are pathetic. The extra £1 trillion borrowed in the last 7 years is creating stability within the banking sector as junk bonds are gradually replaced.
Wiccan of Darkness said:
This thread has been going 3 years 3 months, so I'll believe in a rate rise as and when it happens. My feeling is that they won't raise rates as the UK personal debt bubble is so huge that any rate rise, even 0.5% will start pushing people over the edge. Personal responsibility went out the window 15 years ago with labour, and a rate rise will stifle house price growth. Since that is included in GDP figures, the G won't want to stifle the housing boom.
If rates do go up by 0.5% it will probably trigger a long decline in house prices, as more end up in negative equity, prices stall and slide further, incurring further rate rises.
The second point is they claim it is needed to curb rampant inflation, which is above the BoE's preferred level. But there isn't the economic will to slow inflation, either. National debt is not repaid. It is eroded through inflation. A higher rate of inflation, say 4-5% for a period of 10 years will significantly erode the level of national debt.
Borrowing won't be curbed either. There was a good reason why the deficit wasn't cut as hard, and that was due to the level of toxic debt held by the banks. To increase stability within the banking sector, toxic bonds were gradually replaced with lower risk gilts, hence the high demand for gilts and government bonds. We might be borrowing billions of pounds but the rates on those bonds are pathetic. The extra £1 trillion borrowed in the last 7 years is creating stability within the banking sector as junk bonds are gradually replaced.
An interest rate rise re impact to personal debt bubble will only impact If rates do go up by 0.5% it will probably trigger a long decline in house prices, as more end up in negative equity, prices stall and slide further, incurring further rate rises.
The second point is they claim it is needed to curb rampant inflation, which is above the BoE's preferred level. But there isn't the economic will to slow inflation, either. National debt is not repaid. It is eroded through inflation. A higher rate of inflation, say 4-5% for a period of 10 years will significantly erode the level of national debt.
Borrowing won't be curbed either. There was a good reason why the deficit wasn't cut as hard, and that was due to the level of toxic debt held by the banks. To increase stability within the banking sector, toxic bonds were gradually replaced with lower risk gilts, hence the high demand for gilts and government bonds. We might be borrowing billions of pounds but the rates on those bonds are pathetic. The extra £1 trillion borrowed in the last 7 years is creating stability within the banking sector as junk bonds are gradually replaced.
1. Those on SVR mortgages
2. Those trying to get a new mortgage and when rates go up affordability decreases.
3. Those on tracker mortgages.
Those it will not impact
1. Personal loans taken out are at a fixed %
2. Anyone on a fixed rate mortgage deal
3. Anyone with PCP finance as it's a fixed rate deal.
4. Anyone who has 0% balance transferred or money tfr to current account again as the rate is fixed for a period of time.
5. Those who are on SVR mortgages who see the rate rise commencing and then move to a fixed deal.
It will impact Banks profitability as huge numbers move to a fixed rate so I assume banks will increase the margins on fixed rates.
craigjm said:
Why would he be on gardening leave
He's on the slide towards the date he's announced he's leaving on, less than two years now. His pronouncements before and after the vote suggest he's already demob happy. The BoE needs somebody with reputation and personal ambition at stake well beyond brexit. He's yesterday's man and he got it wrong yesterday. Remember these headlines?George Osborne and Mark Carney admit they were wrong, Brexit predictions misjudged
Carney under fire as Bank admits Brexit vote didn't destroy economy ... he got his predictions wrong again
We got it wrong on Brexit - BoE admits it was too pessimistic
Bank of England admits 'Michael Fish' moment with dire Brexit predictions
Bank of England governor FINALLY admits that Brexit is NOT the biggest risk to UK
He needs to spend more time with his family.
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