5% - no surprise

Milarky

http://www.bankofengland.co.uk/publications/news/2008/044.htm

Lokolo

I want higher rates damnit!

LongTermLurker

Lokolo wrote: »

I want higher rates damnit!

I take it you mean on savings, not mortgages?

Milarky

Lokolo wrote: »

I want higher rates damnit!

Realistically there is very little 'upside' in the willingness of the BOE to move rates. The 'best' you/we can hope for is a long period of rates on hold - against which backdrop you can still shop around for 6.5%+ savings rates (fixed or variable)

I was a bit concerned by talk on the radio yesterday that suggested 'inflation' (by which they mean CPI inflation, of course) could fall below 2% within two years. Interesting, that, for two years there has been gradual tightening of rates by the BOE (up from 4.5% in July 2006) and that didn't stop the CPI letting rip did it? Then we had the relaxation (for 'other' reasons) period (from 5.75% in November 2007) and CPI is somehow expected to 'invert' rapidly. I dunno, maybe it will - but that will be eff all to do with the MPC...

Aegis

Lokolo wrote: »

I want higher rates damnit!

I really really don't.

As I've said before, if you're a borrower or an investor (whether directly, in ISAs or within a pension plan), you generally want lower rates to reduce your outgoings and increase your investment returns. It's only if you've got significant savings that an increase in rates will actually positively affect you anywhere near as much as it will negatively affect someone with a mortgage.

People with excess money can find better returns for it with lower interest rates if they're willing to invest, while people without the excess of money generally benefit from the lower loan values available with lower rates. I think the number of people who will really benefit from higher rates are few and far between.

Sorry if I've just excluded people from my generalisation, but it genuinely baffles me when I actually see people wanting much higher central interest rates considering the consequences of those higher rates.

Lokolo

Yeh but I don't have a mortgage and very very little investments

superstar_2

Lokolo wrote: »

I want higher rates damnit!

yes, I was hoping for a 5.25!

Aegis

Lokolo wrote: »

Yeh but I don't have a mortgage and very very little investments

And have you worked out what additional interest you'd get with, say, a 0.25% rate rise? I find that for most people it seems to come to less than £1 per month, and even for fairly hardcore savers it tends to be less than £10 per month.

All in all it just doesn't strike me as worth the huge increases in mortgage repayment levels for tracker rates.

Still, I guess I'm somewhat biased!

Lokolo

lol yeh but so am I, without a mortgage and stuff I'm not that bothered about IRs highering. Guess in 5/6 years time I will be though!!

I wonder if there was someone who voted for an increase and someone voted for a decrease like last month. Hm.

aardvaak

superstar wrote: »

yes, I was hoping for a 5.25!

Yes I agree or more!

Aegis

aardvaak wrote: »

Yes I agree or more!

The consequences of a rise could have been disastrous on the UK markets though. Especially a rise of more than 0.25%. All in all, the benefits aren't even close to worth the pitfalls.