What will the BOE interest rate be 2 years from now?
Poll: What will the BOE interest rate be 2 years from now?
Total Members Polled: 189
Discussion
Radar Love said:
So we now have the lowest rate for 315 years but where will be in 2 years time?
Probably about 2-3% higher than it is now. This cock-up will last all this year, next year will see some slow recovery but very much a case of laying foundations and small building blocks and it will make no sense to ramp up rates too fast too quickly. So it wont be till 2010 that we will be seeing a return to a reasonably healthy economy at which point rates will start rising again to re-establish some sort of normality. Im sure Noel will be along soon and have a more technical answer that somehow manages to predict the end of the world and a plague upon mankind to last 1000yrs.DJC said:
So it wont be till 2010 that we will be seeing a return to a reasonably healthy economy ...
How about this ?http://www.telegraph.co.uk/finance/financetopics/r...
Projected borrowing of £168 billion around next year?
I wouldn't call that "reasonably healthy" !
RichardD said:
DJC said:
So it wont be till 2010 that we will be seeing a return to a reasonably healthy economy ...
How about this ?http://www.telegraph.co.uk/finance/financetopics/r...
Projected borrowing of £168 billion around next year?
I wouldn't call that "reasonably healthy" !
MiniMan64 said:
I hope they are still low, my new 2 year fixed rate runs out and I'd like to bag a much lower rate before they shoot up again!
+1 
Feeling slightly annoyed (with myself as much as anyone) that I can't take advantage of the only good thing to come out of this government-sponsored f
kup-fest, due to my fixed rate not expiring until summer.It will probably stay low.
We have just had a decade of rates being below 6 percent and below 4 percent for two of those years. The longer this goes on the more people will adjust to low rates. The more people adjust to thinking that 6 percent is really high the harder it will be, personally, politically, socially and possibly even legally to put them higher.
The fall out of increasing rates to 6 percent now would as disasterous for this government as 15 percent was the last tory lot. They won't let it happen.
If we get used to thinking that, say, 2 percent is normal then a rise to 3 percent would have exactly the same impact on the housing market as going from 10 percent to 15.
So houses will be affordable then? Cheap prices and low rates?
No way.
House are, in real terms, more expensive than ever. Most people are obsessed over the estate agent window price. What they forget is that the required deposit has rocketed putting many buyers in a worse position than before prices came down. Add to that the rates that banks actually charge and factor in a bit of job insecurity and no way are homes cheaper in real terms.
In the long term it will get harder and harder to buy a house. It has to do this. The price may go up, deposits may go up, rates may go up, and even if two of those costs go down the overall cost will still go up.
The simple reason is supply and demand.
We have a scarcity of building land, growing concerns over the impact of new building, a population living longer, more likely to stay single for longer and more likely to get divoced plus immigration. All this generates a demand for more homes. They haven't built enough to cope with demand for a long time and less are being built now. So the market will compensate by making it harder.
We have just had a decade of rates being below 6 percent and below 4 percent for two of those years. The longer this goes on the more people will adjust to low rates. The more people adjust to thinking that 6 percent is really high the harder it will be, personally, politically, socially and possibly even legally to put them higher.
The fall out of increasing rates to 6 percent now would as disasterous for this government as 15 percent was the last tory lot. They won't let it happen.
If we get used to thinking that, say, 2 percent is normal then a rise to 3 percent would have exactly the same impact on the housing market as going from 10 percent to 15.
So houses will be affordable then? Cheap prices and low rates?
No way.
House are, in real terms, more expensive than ever. Most people are obsessed over the estate agent window price. What they forget is that the required deposit has rocketed putting many buyers in a worse position than before prices came down. Add to that the rates that banks actually charge and factor in a bit of job insecurity and no way are homes cheaper in real terms.
In the long term it will get harder and harder to buy a house. It has to do this. The price may go up, deposits may go up, rates may go up, and even if two of those costs go down the overall cost will still go up.
The simple reason is supply and demand.
We have a scarcity of building land, growing concerns over the impact of new building, a population living longer, more likely to stay single for longer and more likely to get divoced plus immigration. All this generates a demand for more homes. They haven't built enough to cope with demand for a long time and less are being built now. So the market will compensate by making it harder.
cymtriks said:
It will probably stay low.
We have just had a decade of rates being below 6 percent and below 4 percent for two of those years. The longer this goes on the more people will adjust to low rates. The more people adjust to thinking that 6 percent is really high the harder it will be, personally, politically, socially and possibly even legally to put them higher.
The fall out of increasing rates to 6 percent now would as disasterous for this government as 15 percent was the last tory lot. They won't let it happen.
If we get used to thinking that, say, 2 percent is normal then a rise to 3 percent would have exactly the same impact on the housing market as going from 10 percent to 15.
So houses will be affordable then? Cheap prices and low rates?
No way.
House are, in real terms, more expensive than ever. Most people are obsessed over the estate agent window price. What they forget is that the required deposit has rocketed putting many buyers in a worse position than before prices came down. Add to that the rates that banks actually charge and factor in a bit of job insecurity and no way are homes cheaper in real terms.
In the long term it will get harder and harder to buy a house. It has to do this. The price may go up, deposits may go up, rates may go up, and even if two of those costs go down the overall cost will still go up.
The simple reason is supply and demand.
We have a scarcity of building land, growing concerns over the impact of new building, a population living longer, more likely to stay single for longer and more likely to get divoced plus immigration. All this generates a demand for more homes. They haven't built enough to cope with demand for a long time and less are being built now. So the market will compensate by making it harder.
If all the money we, the country need to borrow was from domestic sources, I would agree with you. But, the size of the budget deficits this Govt is going to be running will require borrowing from investors, who can lend to anyone around the world. They will penalize country's who's economy's are in trouble by raising the interest rates they can demand from them. If Germany can't sell their Bunds, what chance the UK's gilts being attractive unless they come with a high coupon. This will translate into higher domestic interest rates and Brown and King will have no power to prevent it happening, without causing a sterling crisis and an IMF rescue.We have just had a decade of rates being below 6 percent and below 4 percent for two of those years. The longer this goes on the more people will adjust to low rates. The more people adjust to thinking that 6 percent is really high the harder it will be, personally, politically, socially and possibly even legally to put them higher.
The fall out of increasing rates to 6 percent now would as disasterous for this government as 15 percent was the last tory lot. They won't let it happen.
If we get used to thinking that, say, 2 percent is normal then a rise to 3 percent would have exactly the same impact on the housing market as going from 10 percent to 15.
So houses will be affordable then? Cheap prices and low rates?
No way.
House are, in real terms, more expensive than ever. Most people are obsessed over the estate agent window price. What they forget is that the required deposit has rocketed putting many buyers in a worse position than before prices came down. Add to that the rates that banks actually charge and factor in a bit of job insecurity and no way are homes cheaper in real terms.
In the long term it will get harder and harder to buy a house. It has to do this. The price may go up, deposits may go up, rates may go up, and even if two of those costs go down the overall cost will still go up.
The simple reason is supply and demand.
We have a scarcity of building land, growing concerns over the impact of new building, a population living longer, more likely to stay single for longer and more likely to get divoced plus immigration. All this generates a demand for more homes. They haven't built enough to cope with demand for a long time and less are being built now. So the market will compensate by making it harder.
Edited by ianash on Monday 16th February 22:57
CY88 said:
So last year the majority thought a return to 4% by this time next year.
Given we're still at 0.5% does this figure remain the consensus?
1% tops by the end of 2010.Given we're still at 0.5% does this figure remain the consensus?
Election, scared of a very slow persistent recovery will mean a slow rise in interest rates.
Then again, I know f
k all about their inner thoughts so ignore my post 
theres a bit more bad news to come yet chaps so i wouldn't expect rates to go rocketing up over the next 12/24 months ... besides the drag on half a point now is far more than it was pre-crisis ... each to their own tho.
personally i think the govt may conveniently find the inflation target of 2% aggressive when QE lead inflation does eventually rear its ugly head ... well, its either that or keeping the debt value 'real' which when emerging mkts are growing at double digit rates would be incredibly poor form !!!!
just a thought
personally i think the govt may conveniently find the inflation target of 2% aggressive when QE lead inflation does eventually rear its ugly head ... well, its either that or keeping the debt value 'real' which when emerging mkts are growing at double digit rates would be incredibly poor form !!!!
just a thought
I guess it depends on inflation. Once the VAT rearrange gets back on track and taken in to account, where will inflation be in the next 3-6 months.. If it's rising then there will be pressure on the BOE to increase rates to lower inflation. I'm hoping they'll be sensible and leave it below 1% otherwise they'll f*ck up any recovery here.
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