FED cuts by 0.5%

StevieJ

Realy wrote: »

Better than the halfwits on here saying put them up.
Outside the box.:rotfl:
Anyone thinks rates shoud go up are off their box.
I can only think that the only people who want them to go up are desprate to buy a cheap house and do not care about people jobs or the economy.
Why are all other major economys droping theirs in a recession but half the loons in here think they should go up?

Will mor jobs be lost if rates go up? YES.

Infact I dont know why I am arguing as they will be down by .5% at least next week.;)

To be honest I think they are just a bit ?.

StevieJ

ad44downey wrote: »

Michael Portillo said last night that our interest rates need to go UP to encourage a savings culture as opposed to our present debt culture that caused all this mess. I am in total agreement with him. +0.5% would be good for starters although I don't expect it to happen as yet.

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Realy

ManAtHome wrote: »

Unlike the very clever people who just know there is a magic money tree which will provide sufficient liquidity at whatever rate Troosers cares to suggest..?

I have never argued it would improve liquidity, but it could provide needed breathing space for business.

ad44downey

People need to engage their brains and stop being brainwashed

The numpties you now see and hear on the media saying that interest rates are too high are the very same numpties that were saying the same thing 5+ years ago. If only we'd ignored those idiots then we wouldn't be in the mess that we are now in.

van_persie

Those on tracker rates will not benefit fully from rate cuts, for example. Other mortgage products will probably go UP in the event of another IR cut with most banks keen to attract savers rather than borrowers.

StevieJ wrote: »

What does that mean?

It means read the small print. Very few banks will drop their tracker rates below around 3%, despite what the BoE do. Similarly, we are seeing other mortgage rates being raised despite IR cuts. It seems that the only mortgages with decent rates are those which carry less risk - ie: low LTV.

stevetodd

van_persie wrote: »

Those on tracker rates will not benefit fully from rate cuts, for example. Other mortgage products will probably go UP in the event of another IR cut with most banks keen to attract savers rather than borrowers.



It means read the small print. Very few banks will drop their tracker rates below around 3%, despite what the BoE do. Similarly, we are seeing other mortgage rates being raised despite IR cuts. It seems that the only mortgages with decent rates are those which carry less risk - ie: low LTV.

All my mortgages are on BoE trackers (with BMid and Skipton BC), I haven't checked the small print yet for any 'interest rate floor' clauses but if interest rates did go down to say 2% and I had a 3% floor I will not be crying about it, I will de delighted that I am only paying about 3.6%

WTF?_2

StevieJ wrote: »

Simple economics really, BOOM = Increase rates, err, RECESSION = Reduce rates. Unless of course you wish to meet your Waterloo.

Except that rates were kept ridiculously low during the boom, hence putting us in a sticky situation now when ideally they would come down.

WTF?_2

Realy wrote: »

I have never argued it would improve liquidity, but it could provide needed breathing space for business.

If the banks won't lend at close to the headline interest rates, makes not a jot of difference what the base rate is.

The problem right now is a credit contraction NOT an interest rate crisis.

4.5% represents bloody cheap borrowing given the climate of risk out there. If I had cash I'd be very wary of lending it to anyone right now and I certainly wouldn't be handing out 95% mortgages to all and sundry as the government apparently wants the banks to do.

Realy

!!!!!!? wrote: »

4.5% represents bloody cheap borrowing given the climate of risk out there. If I had cash I'd be very wary of lending it to anyone right now and I certainly wouldn't be handing out 95% mortgages to all and sundry as the government apparently wants the banks to do.

My point you cant see past houses can you.

Any business with debts would hopefully see some benefit of a rates cut.

Belive what you like though, its going to happen 0.5% at least. Argue as much as you like about it, you aint going to change the fact they are going down and staying down for a long time.

Why do you think banks are pulling tracker rates?

ManAtHome

Realy wrote: »

Any business with debts would hopefully see some benefit of a rates cut.

Belive what you like though, its going to happen 0.5% at least. Argue as much as you like about it, you aint going to change the fact they are going down and staying down for a long time.

Why do you think banks are pulling tracker rates?

Key bit is why banks are pulling trackers or increasing the margin - my guess is that they are sure that BoE rates will drop regardless of money supply and outstanding debt levels.

BoE rates mean BA to most borrowers - if a company loan becomes unprofitable, the banks just refuse to roll it over or increase the margin over base.

Yes, BoE rates will probably keep on going down, but the money markets aren't following them, so for the majority rates will stay the same or increase.

Only way out I can think of is for central banks to wind up the printing presses to give us another "cheap now, bust later" experience when they have to wind rates (and taxes) back up in a couple of years time (well, some time shortly after May 2010...).