Capital Economics expects a 35 per cent nominal fall and a 41 per cent decline in rea

WTF?_2

Edale wrote: »

You can't turn back the clock, so the situation we have to deal with is a massive debt burden that is threatening to implode putting the whole banking system under strain. Reducing interest rates would help this strain and put something of a floor under property prices. It is not about reinflating property more damage limitation.

What you're proposing is more like drinking a 'hair of the dog' to combat a hangover.

Edale

!!!!!!? wrote: »

What you're proposing is more like drinking a 'hair of the dog' to combat a hangover.

I would say it's more like taking a Resolve!

WTF?_2

Edale wrote: »

I would say it's more like taking a Resolve!

The last time I did that I puked my guts up shortly afterward and left the porcelain stained orange.......

HammersFan

Edale wrote: »

I would say it's more like taking a Resolve!

Well said. Lowering rates would definatley alleviate the suffering and the recent economic events will leave their mark on people - I suspect a more caustious approach will prevail for sometime to come. Why really put people under by whacking up interest rates to deal with a minor inflation problem that looks like solving itself.

!!!!!! I know you want ahigher rate for your savings and lower House Prices, but trying to dress this up as being for the greater good is a bit weak IMO.

WTF?_2

HammersFan wrote: »

!!!!!! I know you want ahigher rate for your savings and lower House Prices, but trying to dress this up as being for the greater good is a bit weak IMO.

I refer you to this post I made regarding the overall effects of weaker sterling (the natural consequence of a too-low rate policy) for me personally, you may not have seen it as it's in another thread here:

http://forums.moneysavingexpert.com/showpost.html?p=13875477&postcount=48


It seems to me that most of the people yelling for lower rates are holding large amounts of debt and simply want to pay lower costs to service it.

Since I don't have any debt myself, I don't have a vested interest in lowering the costs of servicing debt.

Higher interest rates would help my sterling savings but probably erode the value of my foreign currency holdings (vs sterling), which are greater. So personally I'd likely be worse off.

Edale

HammersFan wrote: »

Well said. Lowering rates would definatley alleviate the suffering and the recent economic events will leave their mark on people - I suspect a more caustious approach will prevail for sometime to come. Why really put people under by whacking up interest rates to deal with a minor inflation problem that looks like solving itself.

!!!!!! I know you want ahigher rate for your savings and lower House Prices, but trying to dress this up as being for the greater good is a bit weak IMO.

It is great to have a discussion about this and everyone has their axe to grind. From a personal point of view high interest rates and a major crash would be great. I STR'd recently, more due to personal circumstances forcing this than a wise financial decision. The interest on the equity is more than paying our rent and each month and with extra saved each month our 'war chest' should buy us a much better property in the future.

That said I still think it would be best for the country as a whole if rates were cut tomorrow. I personally would be worse off but would rather live in a strong economy that was growing.

harbinger13

HammersFan wrote: »

Well said. Lowering rates would definatley alleviate the suffering and the recent economic events will leave their mark on people - I suspect a more caustious approach will prevail for sometime to come. Why really put people under by whacking up interest rates to deal with a minor inflation problem that looks like solving itself.

!!!!!! I know you want ahigher rate for your savings and lower House Prices, but trying to dress this up as being for the greater good is a bit weak IMO.

Agreed - the BoE has to make a gesture that it is ready to support the economy as well as trying to break inflation. It has already done its bit on inflation - and it doubled - actually it will take a while before inflation cools off. Now its turn is to shore the economy. As I have been putting points in a couple of other threads which !!!!!! mentions, BoE has to start with a step, -1/4 tomorrow.

The Banks are not going to lend to FTB's who are less of a prime - 100% loans have vanished and wont be coming back for quite some time. The Banks are even so cunning that they will NOT pass the rate cut. But the rate cut will improve the sentiment of the people, that YES the BoE is keeping an eye on the economy as well.

We dont need a drastic cut - as of now, like -3/4, but a gesture would go a long way to assure people.

justpurchased

!!!!!!? wrote: »

It seems to me that most of the people yelling for lower rates are holding large amounts of debt and simply want to pay lower costs to service it.

.

No I would like a lot of comapanies to survive, people to keep thier jobs, children not being subjected to poverty or parental suicides.
Have you not noticed that the economy as stalled and is heading for recession!
People are more likely to survive with a job than with lower mortgage payments! (that goes for people who rent also) Or is the country run to service your savings!

WTF?_2

Well then - why bother setting rates at all? Let's just fix them at 2% forever and live in economic paradise because we know that low rates are always good!

Problem solved :rolleyes:

justpurchased

!!!!!!? wrote: »

Well then - why bother setting rates at all? Let's just fix them at 2% forever and live in economic paradise because we know that low rates are always good!

Problem solved :rolleyes:

No, but they have to respond to the state of the economy not just your savings.
Don't spit your dummy just because you can not see that. Just like people ram down peoples throat lower house prices are a good thing, Recessions are a bad thing.