Interest rates going up soon...
Discussion
Is this for real or just grand-standing?
http://www.bbc.co.uk/news/business-27825643
Are we really seeing the green shoots of recovery or is this off the back of the London housing boom?
http://www.bbc.co.uk/news/business-27825643
Are we really seeing the green shoots of recovery or is this off the back of the London housing boom?
Optimal theory is an economic idea that suggests aannouncing an upcoming action will cause people to alter there behaviour now so by the time the action is due to be taken there is actually no need as the desired results have been achieved.
Say rates will rise people cut back house price settle debts are paid down etc, so no actual need to increase them earlier.
Optimal theory explains why government election promises often never happen as once in power such actions are no longer optimal. ...that or they are all a bunch of self serving
s but it will let you decide that.
Say rates will rise people cut back house price settle debts are paid down etc, so no actual need to increase them earlier.
Optimal theory explains why government election promises often never happen as once in power such actions are no longer optimal. ...that or they are all a bunch of self serving
s but it will let you decide that. Does this theory not assume though that everyone will act and behave rationally?
I have my doubts that the masses will 'cut back' and debts paid down etc just on the news of potential rate rises.
I have my doubts that the masses will 'cut back' and debts paid down etc just on the news of potential rate rises.
Gecko1978 said:
Optimal theory is an economic idea that suggests aannouncing an upcoming action will cause people to alter there behaviour now so by the time the action is due to be taken there is actually no need as the desired results have been achieved.
Say rates will rise people cut back house price settle debts are paid down etc, so no actual need to increase them earlier.
Optimal theory explains why government election promises often never happen as once in power such actions are no longer optimal. ...that or they are all a bunch of self servings but it will let you decide that.
Say rates will rise people cut back house price settle debts are paid down etc, so no actual need to increase them earlier.
Optimal theory explains why government election promises often never happen as once in power such actions are no longer optimal. ...that or they are all a bunch of self serving
s but it will let you decide that. BlackLabel said:
Does this theory not assume though that everyone will act and behave rationally?
I have my doubts that the masses will 'cut back' and debts paid down etc just on the news of potential rate rises.
Wasn't the idea if cutting the rates to get people spending and keeping companies going and employing people?I have my doubts that the masses will 'cut back' and debts paid down etc just on the news of potential rate rises.
Gecko1978 said:
Optimal theory is an economic idea that suggests aannouncing an upcoming action will cause people to alter there behaviour now so by the time the action is due to be taken there is actually no need as the desired results have been achieved.
Say rates will rise people cut back house price settle debts are paid down etc, so no actual need to increase them earlier.
Optimal theory explains why government election promises often never happen as once in power such actions are no longer optimal. ...that or they are all a bunch of self servings but it will let you decide that.
Say rates will rise people cut back house price settle debts are paid down etc, so no actual need to increase them earlier.
Optimal theory explains why government election promises often never happen as once in power such actions are no longer optimal. ...that or they are all a bunch of self serving
s but it will let you decide that. I'm sure i read the plan failed because instead of buying stuff people paid down mortgages/debts
egor110 said:
Wasn't the idea if cutting the rates to get people spending and keeping companies going and employing people?
I'm sure i read the plan failed because instead of buying stuff people paid down mortgages/debts
That's what I did saved like mad, worked loads of hours and cleared my mortgage two years ago, best thing I ever did. Quite a few people at work dreading the rates going up as they are struggling now!I'm sure i read the plan failed because instead of buying stuff people paid down mortgages/debts
Edited by rollondeath on Friday 13th June 20:27
rollondeath said:
That's what I did saved like mad, worked loads of hours and cleared my mortgage two years ago, best thing I ever did.
I did this in 2006, with the help of a redundancy payoff. What I didn't realise at the time was that quite apart from the financial security aspect, the sense of freedom is great. If you're not in debt you can tell the boss to fk off without wondering where you're going to find next month's repayments.Gaspode said:
rollondeath said:
That's what I did saved like mad, worked loads of hours and cleared my mortgage two years ago, best thing I ever did.
I did this in 2006, with the help of a redundancy payoff. What I didn't realise at the time was that quite apart from the financial security aspect, the sense of freedom is great. If you're not in debt you can tell the boss to fk off without wondering where you're going to find next month's repayments.I was lucky as switched to a BOE + .59% tracker around 2008. Just before rates dropped from around 5% to zilch.
As others said the rate drop didn't promote spending but encouraged to take advantage & pay off debt.
I was rather hoping the mortgage company would but me out of a loss maker but didn't happen!
When rates do increase it will be a slow process. Will be years until it's in the 3%+ range, let alone the heady days of the early 90s when it was 10% plus!
As others said the rate drop didn't promote spending but encouraged to take advantage & pay off debt.
I was rather hoping the mortgage company would but me out of a loss maker but didn't happen!
When rates do increase it will be a slow process. Will be years until it's in the 3%+ range, let alone the heady days of the early 90s when it was 10% plus!
I'm at +0.79% and overpaying to get rid of it.
If they do go up I think they'll take it pretty slowly, if they stick (say) 1% of increases out there over the next year it could stagnate growth. Its also certainly a vote loser in the GE "They put my mortgage up, now I can't afford to .... - its the governments fault!" Regardless of whose fault it really is.
I reckon if they do go up we'll see 0.5% before the GE at the most.
If they do go up I think they'll take it pretty slowly, if they stick (say) 1% of increases out there over the next year it could stagnate growth. Its also certainly a vote loser in the GE "They put my mortgage up, now I can't afford to .... - its the governments fault!" Regardless of whose fault it really is.
I reckon if they do go up we'll see 0.5% before the GE at the most.
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