Interest rates
Discussion
Is it me being overly cautious thinking we are about to get a big shock with the rates? I am no expert but whilst on the verge of taking a big plunge,I am very concerned with what the rates will do.
If I took any notice of the doom mongers on www.debtbombshell.com , or www.housepricecrash.com or the various threads on here and elsewhere,I am pretty damned spooked!!!
This is what the experts say and forecast.
From This is money:
Swap markets reflect the City's bank rate expectations. They price in rates to be 1.25% by late summer 2011. Latest: Various forecasting bodies have made upbeat prediction for the economy in recent weeks - the NIESR (9 April) and the CEBR on 16 April. The markets began factoring in a slightly higher chance of rate rises but that soon evapourated with forecasts of rates in five years at a new 2010 low.
Opinion: Inflation is a concern, but there's good reasons why rates will remain lowI've listed some historic swap rate prices to show how the market moves as economic prospects shift. Broadly speaking, the chances of a rate rise have receded since the start of the year:
January 26 (weak economy figures)
• 1.67% in two years
• 3.05% in five years
Source: Bloomberg
January 28 (inflation warning)
• 1.78% in two years
• 3.16% in five years
February 10 (downbeat BoE inflation report)
• 1.59% in two years
• 3.01% in five years
February 17 (3.5% inflation announced)
• 0.94% in one year
• 1.58% in two years
• 3.01% in five years
March 5 (Day after rates were held)
• 0.89% in one year
• 1.68% in two years
• 2.99% in five years
March 11 (after inflation survey)
• 0.87% in one year
• 1.64% in two years
• 2.97% in five years
March 30 (UK economy better than expected)
• 1.05% in one year
• 1.59% in two years
• 2.88% in five years
April 13
• 1.06% in one year
• 1.61% in two years
• 2.94% in five years
April 16
• 1.03% in one year
• 1.55% in two years
• 2.88% in five years
April 20 (After surprise inflation rise)
• 1.05% in one year
• 1.59% in two years
• 2.92% in five years
Read more: http://www.thisismoney.co.uk/interest-rates#ixzz0l...
If I took any notice of the doom mongers on www.debtbombshell.com , or www.housepricecrash.com or the various threads on here and elsewhere,I am pretty damned spooked!!!
This is what the experts say and forecast.
From This is money:
Swap markets reflect the City's bank rate expectations. They price in rates to be 1.25% by late summer 2011. Latest: Various forecasting bodies have made upbeat prediction for the economy in recent weeks - the NIESR (9 April) and the CEBR on 16 April. The markets began factoring in a slightly higher chance of rate rises but that soon evapourated with forecasts of rates in five years at a new 2010 low.
Opinion: Inflation is a concern, but there's good reasons why rates will remain lowI've listed some historic swap rate prices to show how the market moves as economic prospects shift. Broadly speaking, the chances of a rate rise have receded since the start of the year:
January 26 (weak economy figures)
• 1.67% in two years
• 3.05% in five years
Source: Bloomberg
January 28 (inflation warning)
• 1.78% in two years
• 3.16% in five years
February 10 (downbeat BoE inflation report)
• 1.59% in two years
• 3.01% in five years
February 17 (3.5% inflation announced)
• 0.94% in one year
• 1.58% in two years
• 3.01% in five years
March 5 (Day after rates were held)
• 0.89% in one year
• 1.68% in two years
• 2.99% in five years
March 11 (after inflation survey)
• 0.87% in one year
• 1.64% in two years
• 2.97% in five years
March 30 (UK economy better than expected)
• 1.05% in one year
• 1.59% in two years
• 2.88% in five years
April 13
• 1.06% in one year
• 1.61% in two years
• 2.94% in five years
April 16
• 1.03% in one year
• 1.55% in two years
• 2.88% in five years
April 20 (After surprise inflation rise)
• 1.05% in one year
• 1.59% in two years
• 2.92% in five years
Read more: http://www.thisismoney.co.uk/interest-rates#ixzz0l...
I have done a forecast spreadsheet on my predicament and I would start to struggle at rates around 10% with a fix at 2 over base/libor therefore 12% repayment.I would find it very hard at 14% rates paying at 16%, but not impossible if income streams remain.
Anyone think I am being too cautious?
Anyone think I am being too cautious?
I know .Problem is I am just not a risk taker.Years ago with interest rates at15% I had nothing and thus couldnt loose anything.Nows different.
Is 15% all it could go up to?I know there would be millions in the s
t if it did but look what happened in Japan.
Thats the question.You just never know whats in store.
Is 15% all it could go up to?I know there would be millions in the s
t if it did but look what happened in Japan. Thats the question.You just never know whats in store.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff