Discussion
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
The best thing for these predictions is a crystal ball
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 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.
mcflurry said:
The best thing for these predictions is a crystal ball
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 :-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.
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.
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.
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.
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.
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.
Gassing Station | Finance | Top of Page | What's New | My Stuff