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Interest rates to stay below 1% for 5 years?
HAMISH_MCTAVISH
Posts: 28,592 Forumite
http://www.dailymail.co.uk/news/article-1234717/Interest-rates-stay-1-lower-years.htmlThe Bank of England will keep interest rates at 'one per cent or lower' for the next five years, economists said today.
The prediction will delight millions of homeowners who are saving a fortune from the massive cuts in their monthly mortgage payments.
Today the Bank's monetary policy committee voted for the ninth consecutive month to keep the base rate at 0.5 per cent, the lowest rate in its history.
Roger Bootle, economic adviser to the accountants Deloitte, said homeowners, or people thinking of taking out a mortgage, should expect low interest rates to stick around. He said: 'A prolonged period of low interest rates will be required to allow the economy to withstand the looming fiscal austerity.
'My money is on the Bank rate staying at one per cent or lower for five years.'
Mr Bootle, one of the most respect economic forecasters, added the Bank should consider cutting the rate 'all the way to zero.'
His prediction was echoed by other economists as Britain struggles to cope with the longest recession in its history.
Ian McCafferty, chief economic adviser to the business lobby group, the CBI, said: 'Economic growth will be anaemic at best across 2010, so the Bank will have to continue looking to monetary policy levers for some time yet. 'Interest rates are likely to remain low for some time.'
It comes as figures, published yesterday by the Council of Mortgage Lenders, revealed a dramatic pick-up in the number of mortgages being taken out. Since January, the number of loans taken out to buy a home has more than doubled from 23,000 to 55,300 in October.
The number of first-time buyers has also jumped sharply, from an all-time low of 8,600 in January to 19,700 last month.
IR's below 1% for 5 years!!!!!:eek:
That would be amazing for anyone who bought pre crash, with those old good mortgage deals.
Opportunity of a lifetime to pay down mortgage early and knock a decade or more off the term.:T
It'll be interesting to see which way it pans out....
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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http://www.capitaleconomics.com/rogerbootle/index.php
"Roger Bootle is one of the City of London’s best known economists, having worked in or around the financial markets since 1978. As well as being Managing Director of Capital Economics, he is also Economic Adviser to Deloitte..."HAMISH_MCTAVISH wrote: »Capital Economics have the WORST house price prediction record in the history of house price predictions.
Suddenly with his Deloitte hat on, the guy is a genius...?HAMISH_MCTAVISH wrote: »Because when capital economics say prices will fall, it is almost 100% guaranteed they will do the opposite.
What's the opposite of 1% for 5 years...?
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:Act in haste, repent at leisure.
dunstonh wrote:Its a serious financial transaction and one of the biggest things you will ever buy. So, stop treating it like buying an ipod.0 -
HAMISH_MCTAVISH wrote: »http://www.dailymail.co.uk/news/article-1234717/Interest-rates-stay-1-lower-years.html
IR's below 1% for 5 years!!!!!:eek:
That would be amazing for anyone who bought pre crash, with those old good mortgage deals.
Opportunity of a lifetime to pay down mortgage early and knock a decade or more off the term.:T
It'll be interesting to see which way it pans out....
No matter ..... mortgage rates no longer follow base rate.0 -
Quite likely to come true, IMO.
Remember, the BOE's mandate is still to target 2% inflation with monetary policy, as it always has been. Radical rate slashing, Sterling depreciation and QE has just about kept us out of deflation, but there isn't much of a force pushing the other way. Meanwhile, the Euro-zone has been in deflation for five months.
The Euro-optimists are expecting this to end as recovery takes hold, but I think they're kidding themselves. Whilst we've been sorting out our dodgy banks, they're been burying their heads in the sand and consequently are due another credit contraction, significant deflation and the dreaded double-dip. If that happens, it'll probably need another £100B of QE over here to stop them dragging us into the deflationary spiral with them.0 -
IR's below 1% for 5 years!!!!!
That would be amazing for anyone who bought pre crash
In what way amazing ?
Amazing in that the economy will have virtually no growth for an extended period ?
Amazing in that the economy might be so fatally damaged that we stay in the doldrums economically for even longer ?'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
CloudCuckooLand wrote: »http://www.capitaleconomics.com/rogerbootle/index.php
"Roger Bootle is one of the City of London’s best known economists, having worked in or around the financial markets since 1978. As well as being Managing Director of Capital Economics, he is also Economic Adviser to Deloitte..."
Suddenly with his Deloitte hat on, the guy is a genius...?
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
Hoist and petard leaps to mind.
Game Set and Match to CloudCuckooLand"There's no such thing as Macra. Macra do not exist."
"I could play all day in my Green Cathedral".
"The Centuries that divide me shall be undone."
"A dream? Really, Doctor. You'll be consulting the entrails of a sheep next. "0 -
In what way amazing ?
Amazing in that the economy will have virtually no growth for an extended period ?
Amazing in that the economy might be so fatally damaged that we stay in the doldrums economically for even longer ?
Interesting that it's come out that Mr Brown prevented the Treasury from taking stronger action to bring down the Government deficit. By borrowing, a Government or individual brings consumption backwards from tomorrow to today.
The more the Government borrows now, the lower the level of GDP the UK can expect in the future which would be consistent with lower interest rates in the medium term. Longer term it is consistent with lower GDP and interest rates back to the same level, IMO at least.0 -
Hmmm. I'm wary of any interest rate predictions since I took out a fixed rate mortgage in October 2008 when the narrative was all about inflation.0
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Interesting that it's come out that Mr Brown prevented the Treasury from taking stronger action to bring down the Government deficit.
Interesting but no surprise. Of course the Treasury are denying it but the claims seem all too credible when you consider the self-serving individuals involved (Brown and Balls).His prediction was echoed by other economists as Britain struggles to cope with the longest recession in its history. Ian McCafferty, chief economic adviser to the business lobby group, the CBI, said: 'Economic growth will be anaemic at best across 2010, so the Bank will have to continue looking to monetary policy levers for some time yet. 'Interest rates are likely to remain low for some time
Usual standard of reporting from the Mail. The article claims that Bootle's prediction was echoed by other economists yet fails to name any of them other than Ian McCafferty who merely says (in line with just about every commentator) that interest are likely to remain low for some time. That's hardly the same as saying they'll be at 1% or below for the next 5 years.
,0 -
In what way amazing ?
Amazing in that the economy will have virtually no growth for an extended period ?
Amazing in that the economy might be so fatally damaged that we stay in the doldrums economically for even longer ?
Everybofy has to think about there own situation and what benefits them.
For me its great...Paying .99% over the BOE base rate until end of term....So now paying £421.87 less than when my fixed term ended.
Yes i am paying extra off my mortgage which benefits me and my family.
However i do see the negative side in the people getting little or no interest on there life savings.....
Darren0 -
The conservatives are coming, the conservatives are coming...........
This all assumes that BoE gets to continue setting base rates without political interference - and the conservatives don't have a good track record in that department.
Do we believe them when they tell us that they'll leave Interest rates under committee control? Or do we think that they'll use the first opportunity to "crack down" by taking interest rates back under government control.
If it's the latter, god help us all.0
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