Where do you see the Interest rates going ?

[Turn7]

...Over the next five years ?

Im guessing North, but anyone care to guess how far ?

[Integroo]

Nobody knows, certainly nobody here.

The UK Office for Budget Responsibility estimates as follows:

Q4 2018 0.8
Q1 2019 0.9
Q2 2019 1
Q3 2019 1
Q4 2019 1.1
Q1 2020 1.2
Q2 2020 1.2
Q3 2020 1.3
Q4 2020 1.3
Q1 2021 1.4
Q2 2021 1.4
Q3 2021 1.4
Q4 2021 1.5
Q1 2022 1.5
Q2 2022 1.5
Q3 2022 1.5
Q4 2022 1.5
Q1 2023 1.5

This guy thinks they will stay under 5% for the next 20 years: https://www.theguardian.com/business/2018/aug/09/i...

[Turn7]

Good answer....

Im only asking as Im thinking of going fixed for a remort and can hopefully get sub 2%....

Hard to guage things with Brexit one the horizon.

[stongle]

Integroo said:

Nobody knows, certainly nobody here.

even Carney doesn't (on BBC radio), he said:

"There is a very broad range of outcomes, for a number of those rates should be around current levels (or potentially higher). There are other scenarios where they have to be cut".

Even on unwind of QE, Broadbent is on the record as saying we have recalibrated rate expectation to be around 1.5% (down for 2%) unless inflation significantly overshoots.

the scare stories of 15% BoE rates (or wet dreams of some types around here); have very little chance of happening. Nearly every single Central banker is saying Monetary policy alone can no longer steer economies - and there is a lot of data that suggests asset bubbles can be quite resilient to base rate adjustments (which is bad news for those creaming themselves on slowing / reversing house price inflation).

[soupdragon1]

Turn7 said:

...Over the next five years ?

Im guessing North, but anyone care to guess how far ?

I'm guessing North too - approx. 3.25% 5 years from now (no technical analysis in coming up with this number, just a guess)

Its pretty certain to be between 0.1% and 4% I would think.

[Jon39]

Integroo said:

The UK Office for Budget Responsibility estimates as follows:

Q4 2018 0.8
Q1 2019 0.9
Q2 2019 1
Q3 2019 1
Q4 2019 1.1
Q1 2020 1.2
Q2 2020 1.2
Q3 2020 1.3
Q4 2020 1.3
Q1 2021 1.4
Q2 2021 1.4
Q3 2021 1.4
Q4 2021 1.5
Q1 2022 1.5
Q2 2022 1.5
Q3 2022 1.5
Q4 2022 1.5
Q1 2023 1.5

This guy thinks they will stay under 5% for the next 20 years ....

People who try to make long-term economic forecasts, must hope no one remembers what they said. Bookmark this page and look back in 2023, to see how accurate they were..

In my experience, I would want to lock in to a fixed rate for as long as possible. A form of insurance. You probably know that the present base rate is remarkably low historically (since seventeen hundred and something), so one would expect over the long-term, an upward movement is more likely than down. If cash can be eliminated from use, then of course everything changes because negative interest rates then become possible.

Economic shocks have usually appeared fairly suddenly, and often from unexpected events, so difficulty of a government to borrow, currency value fall, sudden upward inflation, could cause interest rates to increase quickly. There are several countries experiencing this at present.

[BoRED S2upid]

Turn7 said:

Good answer....

Im only asking as Im thinking of going fixed for a remort and can hopefully get sub 2%....

Hard to guage things with Brexit one the horizon.

Take it they aren’t going down IMO.

[stongle]

BoRED S2upid said:

Turn7 said:

Good answer....

Im only asking as Im thinking of going fixed for a remort and can hopefully get sub 2%....

Hard to guage things with Brexit one the horizon.

Take it they aren’t going down IMO.

What you basing that on, tea leaves? Its not without credibility as an outcome but show your workings.

Seen it in the tea leaves? or you think Carney will prioritise keeping post BREXIT inflation in check over growth (which the MP playbook says he will do). Sure Carney has put a few warning shots across the governments bow as to where his mandate runs too - but I suspect he's going to have to respond to calls for growth (which is going to require additional fiscal response). Putting rates up whilst you need to do fiscal spend is not going to help, expect him to have his wings clipped if he goes "all-in" on inflation response.

[gibbon]

soupdragon1 said:

I'm guessing North too - approx. 3.25% 5 years from now (no technical analysis in coming up with this number, just a guess)

Its pretty certain to be between 0.1% and 4% I would think.

No chance.

Sub 2% in 5 years would be my bet.

[R11ysf]

anonymous said:

[redacted]

Not comparable in any way to being in ERM at the wrong level and then trying to prop up a currency is it?

Futures are sub 2% going out the the back of 2022. So if you think a lot higher than that then you can very easily make money against the market.

[Integroo]

Why are people plucking figures out of mid-air rather than trusting what the UK Office for Budget Responsibility is saying? Had enough of experts? Sure, they may not be right, but they are much more likely to be right than any of you lot ...

[troika]

I wouldn’t rule anything out. Who would have predicted a decade of ZIRP? You’d have been laughed out of court. I think they will slowly nudge upwards but could see some faster increases if sterling tanks post Brexit. Best thing to do is get rid of debt whilst you can.

[marky1]

Sep 2023 Short Sterling is trading 98.340, this would imply rates are around 1.66%. This is probably the most accurate forecast you will get as it's what the "market" anticipates rates will be. I would think if you can fix for 5 years below 2% it would probably make sense to do it (not that you asked for the advice but that's what I would do).

[tighnamara]

anonymous said:

[redacted]

Yes, but anyone purchasing property during that period has seen increase in value that most likely won’t be seen again.

[Jon39]

anonymous said:

[redacted]

Exchange Rate Mechanism.

At the time, I was very puzzled how it could possibly work.
Currencies continually move in a free market, with supply and demand.
Someone suddenly decides that the market will continue to trade completely freely, but that there will also be theoretical limits to the upward and downward movements of specific currencies.

Two contradictions.

Eventually the currency came close to one of those limits, but still the government tried desperately to control the market, and to make the GBP more attractive, raised the base rate to 15%. Still that failed, so the UK then had to leave the ERM. Currency speculators were active, but if a market remains free, that happens.

All very odd, and very tough on borrowers at that time.

Edited by Jon39 on Thursday 6th September 20:19

[Simpo Two]

Jon39 said:

Eventually the currency came close to one of those limits, but still the government tried desperately to control the market, and to make the GBP more attractive, raised the base rate to 15%. Still that failed, so the UK then had to leave the ERM.

Do we presume that had it come close to the other limit, rates would have headed to zero instead...?

Where would we be now if the plan had worked and we were still in the ERM?

Politcians - know your limits!

[BoRED S2upid]

stongle said:

BoRED S2upid said:

Turn7 said:

Good answer....

Im only asking as Im thinking of going fixed for a remort and can hopefully get sub 2%....

Hard to guage things with Brexit one the horizon.

Take it they aren’t going down IMO.

What you basing that on, tea leaves? Its not without credibility as an outcome but show your workings.

Seen it in the tea leaves? or you think Carney will prioritise keeping post BREXIT inflation in check over growth (which the MP playbook says he will do). Sure Carney has put a few warning shots across the governments bow as to where his mandate runs too - but I suspect he's going to have to respond to calls for growth (which is going to require additional fiscal response). Putting rates up whilst you need to do fiscal spend is not going to help, expect him to have his wings clipped if he goes "all-in" on inflation response.

I’m basing it on the fact there isn’t much room to go any further down ok 0.25 maybe even 0.5 but in my opinion (which is what IMO stands for) it’s a good rate to fix at and he should do it just for the piece of mind.

[Lemming Train]

anonymous said:

[redacted]

Half of the population would be homeless if they ever reach 15%. In fact, half of the population would be on their way to being homeless if the rate reached just half that. A vast number of property owners are only just managing to keep their heads above the water on the rate it is now.

[NerveAgent]

Lemming Train said:

Half of the population would be homeless if they ever reach 15%. In fact, half of the population would be on their way to being homeless if the rate reached just half that. A vast number of property owners are only just managing to keep their heads above the water on the rate it is now.

Yes it would be a real problem that the government will be doing everything to avoid.

I think a lot of the I’m alright Jacks fail to realise what a devastating impact having the brunt of your workforce in this situation would have on almost everyone.

[audidoody]

I remember getting a 4.4 per cent five year fixed and thinking it was like a lottery win.