Base Rate - 2010 and on - where IS it going ?
Discussion
I wonder what will happen to inflation, rather than the emotive and belief ridden base rate crystal balling.
If inflation takes off properly, which it will do at some point fo shizzle, the BOE will jack the rates up. Looking at how the brownturn was documented like a soap omnibus, people will possibly move in bigger chunks than before. Hence there could be large sheep activity.
The rates going up in the smallest newsworthy/psychological increments to however high is required. I'd say give it 18 months or so and we could see the 20y average (according to a graph I looked at) of 9%. The worst case is higher than this by a lot.
Inflation is inevitable and the realities which contribute to it suggest that it could be more marked/greater rate than previous circumstances. Unless the BOE are hellbent on everyone suffering a major life price hike due to currency devaluation, we'll see the interest rates rise loads.
We are at an extreme seesaw position with a lot of weight having been added to the other end. When the pause button of QE has been ended and the glow at the other end of tunnel appears, I think there will be the s
t hitting the fan.
Sadly, it will be people eating st vs everyone eating st.
Everyone eating st (aka inflation and currency devaluation) will produce less tax revenue, hence the higher rates and individuals defaulting will be the likely scenario IMO.
We've had the good times, the basic realities have changed and when the pause button has worn out, we're going to be in the st bigtime.
Hopefully, all this will happen just as the Callmedavervatives jump into the hotseat to take all the blame for everything.
That's my prediction.
I know that people are looking to downsize in anticipation of what will happen next. If they are too gentle with the rates, the currency will take the hit and the st will hit the fan on the other side.
We shall see, eh?
Of course, it won't be that bad, nothing will change much, they may add 0.5% per quarter and house values will stay the same, developers will start building and gradually, the unemployed will go back to work, increased activity will see that we are well beyond the worst of it..... Getting on with the job, etc.
God taketh away with one hand when he gaveth with the other.
If inflation takes off properly, which it will do at some point fo shizzle, the BOE will jack the rates up. Looking at how the brownturn was documented like a soap omnibus, people will possibly move in bigger chunks than before. Hence there could be large sheep activity.
The rates going up in the smallest newsworthy/psychological increments to however high is required. I'd say give it 18 months or so and we could see the 20y average (according to a graph I looked at) of 9%. The worst case is higher than this by a lot.
Inflation is inevitable and the realities which contribute to it suggest that it could be more marked/greater rate than previous circumstances. Unless the BOE are hellbent on everyone suffering a major life price hike due to currency devaluation, we'll see the interest rates rise loads.
We are at an extreme seesaw position with a lot of weight having been added to the other end. When the pause button of QE has been ended and the glow at the other end of tunnel appears, I think there will be the s
t hitting the fan. Sadly, it will be people eating s
t vs everyone eating st. Everyone eating s
t (aka inflation and currency devaluation) will produce less tax revenue, hence the higher rates and individuals defaulting will be the likely scenario IMO. We've had the good times, the basic realities have changed and when the pause button has worn out, we're going to be in the s
t bigtime. Hopefully, all this will happen just as the Callmedavervatives jump into the hotseat to take all the blame for everything.
That's my prediction.
I know that people are looking to downsize in anticipation of what will happen next. If they are too gentle with the rates, the currency will take the hit and the s
t will hit the fan on the other side. We shall see, eh?
Of course, it won't be that bad, nothing will change much, they may add 0.5% per quarter and house values will stay the same, developers will start building and gradually, the unemployed will go back to work, increased activity will see that we are well beyond the worst of it..... Getting on with the job, etc.
God taketh away with one hand when he gaveth with the other.
andy-xr said:
I chickened it and went for 5.25% fixed for 3 years. I just get the feeling that it's going to get silly late Summer and the deal would have long gone.
Me too, although 5.49% over 5 years. I agree with most of the posters that it'll be 1-1.5% by year end, but then who knows after that?? At best it is only educated guesswork/Merlot said:
andy-xr said:
I chickened it and went for 5.25% fixed for 3 years. I just get the feeling that it's going to get silly late Summer and the deal would have long gone.
Me too, although 5.49% over 5 years. I agree with most of the posters that it'll be 1-1.5% by year end, but then who knows after that?? At best it is only educated guesswork/Hi Tonker, if you’ve been on +.95 for a while are you still tied in?
Why not sit tight and jump ship when there’s been 2-3 consecutive rises?
My personal prediction will be +.5 every 6 months over the next 18, beyond that who knows (even within that, who knows).
Fingers crossed, as I made a mistake of waiting an additional 3 days to confirm my last mortgage and missed the +.25 lifetime tracker with no tie in – grrr.
Instead got .35 for 2 years which dragged the payments down from circ £1600 to £280 – back on variable rate Q1 this year
3 bleedin’ days procrastination.
Why not sit tight and jump ship when there’s been 2-3 consecutive rises?
My personal prediction will be +.5 every 6 months over the next 18, beyond that who knows (even within that, who knows).
Fingers crossed, as I made a mistake of waiting an additional 3 days to confirm my last mortgage and missed the +.25 lifetime tracker with no tie in – grrr.
Instead got .35 for 2 years which dragged the payments down from circ £1600 to £280 – back on variable rate Q1 this year
3 bleedin’ days procrastination.
DonnyMac said:
Hi Tonker, if you’ve been on +.95 for a while are you still tied in?
Why not sit tight and jump ship when there’s been 2-3 consecutive rises?
Problem is what effect will these rises have on fixed rates? Jump now and get a good rate, but worse than the tracker, or wait and jump when they go up?Why not sit tight and jump ship when there’s been 2-3 consecutive rises?
My fixed rate runs out in 2012...just in time to catch the rate rises (that's my prediction)
I'm giving serious thought to coughing up the penalty (£2000) and going for a long term fixed rate. I'm just not a gambler and like the 'security' of knowing what I'll be paying. A ten year one would do me.
I'm giving serious thought to coughing up the penalty (£2000) and going for a long term fixed rate. I'm just not a gambler and like the 'security' of knowing what I'll be paying. A ten year one would do me.
anonymous said:
[redacted]
My point was more "inflation is happening and the rate WILL increase a lot, in order to curb it, the base rate WILL be put up".Speak of Base Rates and you get the same responses from those people who are certain their houses will not decrease in value.
I know one couple quite well who got their sexed up circumstances sexed up even further to get an NR mortgage. They are in the position where they are unlikely to get a remortgage via the sensible lending criteria and are coming back onto the variable rate (as you mention). They are chopping their house in (and set to lose about £30k) for a smaller one. I imagine there are plenty of people in the same situation who are ignorant of what is about to happen and will get caught in the pinch.
The above calculated that for their particular mortgage (£140k@£1k/m ) a 2% rise in base rate would equate to a £150 a month increase. Since they are on about 3% at the moment (I think) an increase to 9% or so (20 year average according to a decent source-and that isn't hugely skewed by freak figures) could get a tad more expensive indeed!
Looking at the ignored unemployment situation, it isn't really possible to just get another job, or just start making money.
Perhaps it won't all disappear down the drain, but it most certainly has all the ingredients to.
In my opinion, I imagine that there are a lot of people who can't actually afford more than a few % increase on base. This for sure will happen as inflation will otherwise nail the country for years to come.
Consider that the Tories failed largely over high interest rates.
Consider that the average rate since 1997 is less than 5 percent.
Consider that rates have not been over 6 percent since 1998.
Add those together and the government (from an electoral point of view) will probably not dare to allow rates to go much over 5 percent.
Consider that the average rate since 1997 is less than 5 percent.
Consider that rates have not been over 6 percent since 1998.
Add those together and the government (from an electoral point of view) will probably not dare to allow rates to go much over 5 percent.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff