Emergency Interest Rate Cut
Discussion
0.25% base rate now
and pretty much forcing lenders to pass it on via a new term funding scheme, release of counter cyclical buffer etc
https://www.bankofengland.co.uk/news/2020/march/bo...
The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove sharp and large, but should be temporary. The Bank’s three policy committees are today announcing a comprehensive and timely package of measures to help UK businesses and households bridge across the economic disruption that is likely to be associated with Covid-19. These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm.
and pretty much forcing lenders to pass it on via a new term funding scheme, release of counter cyclical buffer etc
https://www.bankofengland.co.uk/news/2020/march/bo...
The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove sharp and large, but should be temporary. The Bank’s three policy committees are today announcing a comprehensive and timely package of measures to help UK businesses and households bridge across the economic disruption that is likely to be associated with Covid-19. These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm.
Edited by anonymous-user on Wednesday 11th March 07:26
I'm surprised at this move. This would not have happened previously unless the EU agreed a simultaneous cut across the EU. This was an agreement to ensure no unfair advantages were gained. I would have thought this would not be allowed under the transition agreement.
Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
MYOB said:
I'm surprised at this move. This would not have happened previously unless the EU agreed a simultaneous cut across the EU. This was an agreement to ensure no unfair advantages were gained. I would have thought this would not be allowed under the transition agreement.
Was there? I remember rates going up and down all the time, independent of the EU (Black Wednesday?)Linky?
MYOB said:
I'm surprised at this move. This would not have happened previously unless the EU agreed a simultaneous cut across the EU. This was an agreement to ensure no unfair advantages were gained. I would have thought this would not be allowed under the transition agreement.
Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
Really? Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
Sauce please....
C0ffin D0dger said:
Tracker mortgage = luverly jubberly! 
GRR! I had a first time mortgage which when I applied for it, because it was the height of brexit and the market was a bit uncertain I plumped for a 5 year fixed. Huge mistake, my rate would be so much lower now and I can't change it for another year! 
MYOB said:
I'm surprised at this move. This would not have happened previously unless the EU agreed a simultaneous cut across the EU. This was an agreement to ensure no unfair advantages were gained. I would have thought this would not be allowed under the transition agreement.
Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
Hasn't the ECB base rate been in minus figures for the last 5 years?Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
speedy_thrills said:
Helicopter money/UBI coming soon! I don't blame them however, they need to get money into consumers pockets to keep them spending and stave off deflation.
Not really that great for the sensible savers who have managed to put something aside for a rainy day. Or is this just another attack on money hoarders who are not doing their duty and getting into debt to spend every penny they can on junk they don't need?I suspect I will be getting an email from Marcus very soon.
How on the one hand can we be told we need to stop consuming to save the environment, but then be encouraged to consume to keep the bubble economy going?
grassomaniac said:
GRR! I had a first time mortgage which when I applied for it, because it was the height of brexit and the market was a bit uncertain I plumped for a 5 year fixed. Huge mistake, my rate would be so much lower now and I can't change it for another year!
I did that in 2006, was pretty sickening watching rates quickly drop to 0.5% and everyone bragging about their tracker mortgages in the office. That one decision probably cost me £20k in extra interest payments. Was particularly hard as we had just had our first child and I was the sole breadwinner.Edited by anonymous-user on Wednesday 11th March 09:39
Stongle! Am I right in thinking that having spent a decade increasing capital requirements to derisk our banking sector, those rules are now being dropped?
Increasing the chances of systemic sector risk, in order to provide short term 'buffers', that'll take even more decades to rebuild?
I really, really hope not. If that sort of stimulus is needed, then it should be coming directly from the printing presses not the safeguards.
Base rate tracker here, so good news.
However, I do wonder what the point of this rate cut is. If lots of people are off work, potentially not getting paid if they are self employed, there is a need to get money in people's pockets to either pay their immediate bills or perhaps just get them out there spending a little more to keep things moving.
I'm no economist, but lowering interest rates and throwing money at the banks seems to me a licence for banks to print money. The assumption being that businesses and people will have greater need to borrow money to tide themselves over. Yes, it might be at cheaper rate, but the banks are quids in by people and business running up debt from having to borrow at even modest interest rates, just to survive.
Those that have no money, and no means to borrow money, or security on which to get a loan, will be no better off. They are likely to be the ones on minimum wage / zero hours working arrangements and getting in hock even deeper doesn't seem to me to be a very attractive solution.
I'd much rather the Government find a route to directly giving money to people for them to spend or pay bills and avoid the banks altogether. At least in that way there is a more immediate potential for economic activity to be maintained and for long term personal debts not just to get bigger than if you have to be forced onto a loan book of a bank.
However, I do wonder what the point of this rate cut is. If lots of people are off work, potentially not getting paid if they are self employed, there is a need to get money in people's pockets to either pay their immediate bills or perhaps just get them out there spending a little more to keep things moving.
I'm no economist, but lowering interest rates and throwing money at the banks seems to me a licence for banks to print money. The assumption being that businesses and people will have greater need to borrow money to tide themselves over. Yes, it might be at cheaper rate, but the banks are quids in by people and business running up debt from having to borrow at even modest interest rates, just to survive.
Those that have no money, and no means to borrow money, or security on which to get a loan, will be no better off. They are likely to be the ones on minimum wage / zero hours working arrangements and getting in hock even deeper doesn't seem to me to be a very attractive solution.
I'd much rather the Government find a route to directly giving money to people for them to spend or pay bills and avoid the banks altogether. At least in that way there is a more immediate potential for economic activity to be maintained and for long term personal debts not just to get bigger than if you have to be forced onto a loan book of a bank.
grassomaniac said:
GRR! I had a first time mortgage which when I applied for it, because it was the height of brexit and the market was a bit uncertain I plumped for a 5 year fixed. Huge mistake, my rate would be so much lower now and I can't change it for another year!
Not a mistake, you were uncertain at the time and wanted stability. So you opted for the bank to take on the risk of any rate changes including the associated loss/gain. MYOB said:
I'm surprised at this move. This would not have happened previously unless the EU agreed a simultaneous cut across the EU. This was an agreement to ensure no unfair advantages were gained. I would have thought this would not be allowed under the transition agreement.
Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
Absolute cast iron gold-plated 100% testicles.Things must be pretty drastic for this to have happened. Budget Day will be interesting, if it goes ahead.
untakenname said:
As a psychological boost maybe needed a couple of months down the line if the economy is in the doldrums in the summertime.
Doing it now leaves them nowhere to go especially if there's a global downturn this year (which now looks likely).
Why wait for the economy to be in the doldrums? Act now and act decisively seems quite sensible.Doing it now leaves them nowhere to go especially if there's a global downturn this year (which now looks likely).
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