1 month LIBOR

[Hobo]

Anyone have a view on what will happen to this in next 24 months. Currently around 0.6%, however prior to current 'troubles' it seemed to be constantly between 5-5.5%.

[Dave_ST220]

Haven't a clue but if the BoE base rate does not dictate what banks lend at as we are to believe(LIBOR matters) then how come mortgages are still around 5-6%(fixed rate that is) when they were the same a while back when LIBOR was much higher? A bit like why is petrol over £1 a litre AGAIN i guess

[Road Pest]

Don't swap rates affect fixed rates and LIBOR affect trackers?

[Dave_ST220]

God knows, i think there is just a generic "bullst rate", AKA, "charge as much as we dare get away with".

[mcflurry]

The best thing for these predictions is a crystal ball

Dave_ST220 said:

Haven't a clue but if the BoE base rate does not dictate what banks lend at as we are to believe(LIBOR matters) then how come mortgages are still around 5-6%(fixed rate that is) when they were the same a while back when LIBOR was much higher?

Because LIBOR is the rate used to lend money between banks. if you were a bank with government funding/backing and not a homeowner then you too would be able to borrow at those levels - after all it's the average of 8 banks doing exactly that (it's the average of 16 banks, taking away the 2 sets of 4 outlying numbers)

Banks are businesses that need to earn money. Now that a proportion of the overspending population wants bank charges refunded, plus more homes are repossessed, that will cause the cost of borrowing to rise.

[Dave_ST220]

mcflurry said:

The best thing for these predictions is a crystal ball

Dave_ST220 said:

Haven't a clue but if the BoE base rate does not dictate what banks lend at as we are to believe(LIBOR matters) then how come mortgages are still around 5-6%(fixed rate that is) when they were the same a while back when LIBOR was much higher?

Because LIBOR is the rate used to lend money between banks. if you were a bank with government funding/backing and not a homeowner then you too would be able to borrow at those levels - after all it's the average of 8 banks doing exactly that (it's the average of 16 banks, taking away the 2 sets of 4 outlying numbers)

Banks are businesses that need to earn money. Now that a proportion of the overspending population wants bank charges refunded, plus more homes are repossessed, that will cause the cost of borrowing to rise.

OT rant :-

Banks make plenty of ££, i pay god knows what each month for the priviledge of having a business account, personal accounts are free-but not for much longer i would bet. For every £1 i borrow i pay back £1.66 by memory. Yeah, times are tuff for gready fking banks that made the mess in the first place by wreckless lending. Remind me what the new boss of RBS will be paid again?

As you were.

[Hobo]

So can I assume no one really has an opinion on what will be happening to the one month LIBOR rate in the next 24 months ?

[Dave_ST220]

Hobo said:

So can I assume no one really has an opinion on what will be happening to the one month LIBOR rate in the next 24 months ?

As above-i don't think anyone knows, if i were a betting man i would say UP.

[Hobo]

So would I. I am more interested to what level though (hopefully not to more than 3%).

[Dave_ST220]

Well i've just gone onto a variable rate mortgage for the first time in my life, I have bugeted for rates as high as 12%! Hopefully they won't but you never know....

[Road Pest]

These threads used to get so much more of a response.

[aka_kerrly]

The libor is just a mean average of what banks lend to each other at calculated on a daily basis. the problem is there are so many variables that can effect it and even the banks dont exactly what the figure is.

the BofE hasnt upped interest rates for a while now and if they are restrained then they will leave them be for a while longer yet until such a point that the banks are stable and their creditworthness is restored.

[P-Jay]

My 2p....

The difference between BOER and LIBOR will continue to narrow as the sector becomes more stable (we can only hope). However BOER can only really go one way now. If the situation continues to (very) slowly improve the BOE will want to slam the lid on the usualy post-recession inflation.