Interest rates unchanged.
Discussion
Fittster said:
Is there any evidence to suggest the market can accurately predict anything over those time scales? A lot can happen in 10 years.
No - and they will never get it right, but investors in the market are buying those gilts i.e. lending to UK plc so it's probably good to know what they are thinking so as to speak.Edited by fido on Thursday 9th September 16:01
fido said:
No - and they will never get it right, but investors in the market are buying those gilts i.e. lending to UK plc so it's probably good to know what they are thinking so as to speak.
Or assuming, based upon past performance.Edited by fido on Thursday 9th September 16:01
That UK Governments have, up to the present, never defaulted.
OK, perhaps, from time to time, a little assistance or "direction pointing" has been required.
Oh and also, the population has never staged a bloody revolution.
Up to now having accepted the austerity asked.
Im not sure that raising interest rates will curb the current inflation we are facing in the UK, I believe alot is down to the weak pound, so we are importing goods that basically now cost more, VAT up from last year, food prices up due to external non UK forces....so increasing UK base rate wont do anything to stop this, hence BOE isnt that worried. If the UK market was overheating with too much demand changing too little supply then I would understand them wanting to reduce the cash in the market.
I recon alot of people with variable mortgages will have gotten used to having repayments of £200-500 per month when they used to be £1000+ 2 years ago, what happens to those when the rate goes up...they will be bankrupt!!!
( Im still stuck on fixed 5% so low base rate hasnt helped me!)
I recon alot of people with variable mortgages will have gotten used to having repayments of £200-500 per month when they used to be £1000+ 2 years ago, what happens to those when the rate goes up...they will be bankrupt!!!
( Im still stuck on fixed 5% so low base rate hasnt helped me!)
Fittster said:
Well once again the BoE seems to have decided to ignore the inflation target. What's the point of the target if there is no consequence on the Bank for ignoring it?
Let's see what the inflation figure looks like on the 14th.
You know the answer to this, I'm sure.Let's see what the inflation figure looks like on the 14th.
Some call it "kicking the can down the road".
WhoseGeneration said:
Fittster said:
Well once again the BoE seems to have decided to ignore the inflation target. What's the point of the target if there is no consequence on the Bank for ignoring it?
Let's see what the inflation figure looks like on the 14th.
You know the answer to this, I'm sure.Let's see what the inflation figure looks like on the 14th.
Some call it "kicking the can down the road".
NoelWatson said:
WhoseGeneration said:
That UK Governments have, up to the present, never defaulted.
They haveGiven the relatively precarious balance in the economy right now you would have to be a rank idiot to start ramping up the interest rates at the moment.
You can save that for when the country can afford it. Right now it cant. Is it ideal? No. Is it the only show in town right now? Yes.
Fortunately this is a really simple one so we dont have to suffer the economists getting a say or opinion on it, so it doesnt bother me so much. When we start listening to the economists again, thats when Ill start worrying.
You can save that for when the country can afford it. Right now it cant. Is it ideal? No. Is it the only show in town right now? Yes.
Fortunately this is a really simple one so we dont have to suffer the economists getting a say or opinion on it, so it doesnt bother me so much. When we start listening to the economists again, thats when Ill start worrying.
DJC said:
Given the relatively precarious balance in the economy right now you would have to be a rank idiot to start ramping up the interest rates at the moment.
You can save that for when the country can afford it. Right now it cant. Is it ideal? No. Is it the only show in town right now? Yes.
There is an argument for allowing inflation to rise at the moment (lets put the pros and cons of that position to one side for a bit).You can save that for when the country can afford it. Right now it cant. Is it ideal? No. Is it the only show in town right now? Yes.
Going back to my earlier point, if we need low interest rates to support the economy why give the BoE a target on inflation? Wouldn't they be better off with a general aim of managing the overall economy. It seems pointless giving them a target and then not demanding they hit it.
Edited by Fittster on Friday 10th September 11:19
Raising interest rates isn’t the only way to control inflation. Cutting public spending also reduces inflationary pressure.
There’s a reasonable argument that with so much of our inflation being imported, a base rate rise may not impact upon it in the manner they have in the past. The exchange rate is linked to both the base rate and the strength of the economy. Increasing the base rate would at this point in the cycle damage the underlying economic strength, and so may not reduce inflation because it may not strengthen the pound.
So how else can the UK fight inflationary pressure? Public spending cuts (actual cuts, not just real terms reductions) would target domestic inflationary pressures, at the same time as repairing the states tattered balance sheet. The currency would likely strengthen a little based on a lower future borrowing requirement, and this would further reduce imported inflation.
There’s a large amount of spare capacity in the economy at present, so we’re unlikely to see an inflationary spiral triggered by running a low base rate and a higher rate of inflation than is normally desirable. Recovery, when it comes, will likely be a jobless recovery for the first couple of years, unfortunately, which would allow time for monetary tightening before inflation takes off.
My mortgage is fixed, and I have some savings in cash, so I’d do quite nicely out of increasing interest rates but I just don’t see it happening any time soon. My estimate for the first base rate rises is presently either late in 2012, or if we don’t get an “Olympic” boost and QEII docks, then I’d push that back to 2014.
There’s a reasonable argument that with so much of our inflation being imported, a base rate rise may not impact upon it in the manner they have in the past. The exchange rate is linked to both the base rate and the strength of the economy. Increasing the base rate would at this point in the cycle damage the underlying economic strength, and so may not reduce inflation because it may not strengthen the pound.
So how else can the UK fight inflationary pressure? Public spending cuts (actual cuts, not just real terms reductions) would target domestic inflationary pressures, at the same time as repairing the states tattered balance sheet. The currency would likely strengthen a little based on a lower future borrowing requirement, and this would further reduce imported inflation.
There’s a large amount of spare capacity in the economy at present, so we’re unlikely to see an inflationary spiral triggered by running a low base rate and a higher rate of inflation than is normally desirable. Recovery, when it comes, will likely be a jobless recovery for the first couple of years, unfortunately, which would allow time for monetary tightening before inflation takes off.
My mortgage is fixed, and I have some savings in cash, so I’d do quite nicely out of increasing interest rates but I just don’t see it happening any time soon. My estimate for the first base rate rises is presently either late in 2012, or if we don’t get an “Olympic” boost and QEII docks, then I’d push that back to 2014.
) Plus, constatntly paying a ridiculous booking fee every few years reduces any savings.auditt said:
slipstream 1985 said:
im on 7% fixed. another 4 years yet.
BloodyhellWHat lender if you dont mind me asking and when did you lock in?
Whats the fee to get out of this product?
get out costs... well lets just say i wont be getting out of it. i laugh at older people that complain about the cost of living in a similar job to me. yeah nightmare mortgage you have on your 3 or 4 bed detached you bought 10 years ago...
fido said:
NoelWatson said:
WhoseGeneration said:
That UK Governments have, up to the present, never defaulted.
They have
. The 64 million-d question is how much of the debt is index linked?. I have never seen that information available anywhere although to be fair havent looked that hard. Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff