MSE News: Could base rate stay at 0.5% until 2014?

Former_MSE_Guy · 26 July 2010 at 9:53AM

This is the discussion thread for the following MSE News Story:

"A leading economic forecaster today said interest rates will have to stay at their record low for longer than expected ..."

Read the full story:
Could base rate stay at 0.5% until 2014?

dunstonh · 26 July 2010 at 10:05AM

MSE News: Could base rate stay at 0.5% until 2014?

Shouldn't this thread be in the debating forum as it just an opinion and not fact. There were other articles over the weekend that suggested rises will start Q3 next year. Those were also opinions. However, they were equally as valid as, to be honest, nobody has a clue what is going to happen. The financial models used to make these predictions are based on many assumptions. The outcomes can change on a figure being amended by 0.000001%

You start the title of the thread as MSE NEWS but its not news and frame it as a question.

Given the weight that some people put behind an official MSE posting, wouldnt it be better for MSE to stick to facts or put opinion/debate threads in the debating forum?

lisyloo · 26 July 2010 at 10:48AM

I always look at a spectrum of opinion and a range of possibilities.

It looks like a number of opinions are moving to Q2 or Q3 2011 before we see rate rises, rather than Q4 2010.
This move in the spectrum of opinion is interesting and seems logical given the austerity measures and that inflation is falling.

trynsave · 26 July 2010 at 6:29PM

MSE Guy back with yet more headline journalistic reporting. Frankly I'm getting sick of it. Please pack it in!

cashbackproblems · 26 July 2010 at 9:04PM

what a load of rubbish, only last week the bank of england acknowledged that they didnt know why inflation was almost double their target and they wouldnt be raising interest rates "yet" as the economy was still fragile. The fact that inflation is only set to rise with mass money printing filtering through the world economy, shortage of capacity and a Tory govt, means base rate increases are inevitable even before the end of this year.

B.E.N · 26 July 2010 at 11:34PM

The 'news articles' on this site are of very low quality.

In recent weeks, we've had:

- Complete (sometimes contradictory) speculation - e.g. this article

- Severe controversy over the recommendation of the NS+I product (as the rate mentioned was not guaranteed and wouldn't actually be available to new investors)

It's also been the case often that I've gone to read an something that looks interesting, only to find that it is what I would call 'information-lite' (similar to reading the Gutter-press to be honest, shiny headlines but little real/new info).

Very disappointing, especially as the rest of this site (forums/guides, etc) are so good.

The_Thrilla · 27 July 2010 at 9:39AM

I was reading an old advert for National Savings Certificates during the Second World War. Even during the war, the interest rates were higher than they are now. I have met some elderly people who are living on their capital, and by the time the interest rates rise these poor folk will be cleaned out.

As to when the interest rates rise...

The Bank of England will not raise them when they think the time is right. They will raise them when the yields in the long term bond market forces them to raise them. Then they will come out all smiles and pretend that they have control of the situation.

dunstonh · 27 July 2010 at 10:29AM

I have met some elderly people who are living on their capital, and by the time the interest rates rise these poor folk will be cleaned out.

Well they should consider options where that doesnt happen then.

movilogo · 27 July 2010 at 12:18PM

The fact is no one knows when IR will go up. One week experts say it will stay low, next week same experts claim it should go up.

The economic downturn proved the fact that it is not worth listening to those experts.

udydudy · 27 July 2010 at 12:38PM

Simple these so called experts(used to be one of them...an Investment Manager in Asia) have always mostly been wrong. They all flow with the tide...like in 2007 there was no end to the bullish predictions even though US economy already was in doldrums and Detrooit suburbs in tatters with houses prices more at junk rates!!!....

IMHO as I have said before rates will rise by this year end. The economy will be in the second dip by then but rates will still go up. If you look at the BoE they waited until statistics showed that the economy was going down before they lowered interest rates but then it was too late thats why they had to lower rates super fast(nearly every altearnate month or multiple 25bps)...

thats why greenspan will always be remembered(ireespective of negative opinions), he was able to keep the economy going because he did not wait for statistics, he raised or lowered rates based on economic status(overheating bubbles or slowing). Thats where bernanke like King went wrong both waited fo r th numbers. The numbers/statistics always are lagging the reality on the street!!!!

Watch the next 6 months, we will see the double dip in economic reality as all the stimulus works its way out of the economy and reality kicks in but the rates will still rise.

Good news for savers!!!!

lisyloo · 27 July 2010 at 1:35PM

I have met some elderly people who are living on their capital, and by the time the interest rates rise these poor folk will be cleaned out.

I agree wth dunstonh.
They made a huge assumption in their financial planning.
They should have got something that would have gievn them a guaranteed ncome (like an annuity for example).

MSE News: Could base rate stay at 0.5% until 2014?

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