BOE Rates hit 1.5%

Kenny4315

My view on mortgages pretty much echoes what has been said already, I think that with these pair of idiots in charge (Mr CLown & Hs Darling) BBR is likely to get down to close to zero if not 0% in the next 3 months. I think that they will remain low however for a period of time, because it's such a mess and they haven't got a clue what else to do. But if you see a good fixed deal in a few months time for a long period of time then that's what I'd take, as given the track record of these two idiots the UK may just get into a hyper inflation period which they will try to bring under control with .... predictably ... interest rate rises.

What I like about these two is they are at least consistently useless. I also love that they have had a long term balanced plan for the economy, rather than just relying of the BofE as a scapegoat, who are just puppets.

If they had put in house price indicators into the inflation figures then maybe the BofE could have controlled this situation in the first place by hiking up interest rates to bring the market under control, rather than just allowing debt to spiral becaue the 'shopping basket' does not contain any of the big items, council tax, house prices, etc. Council Tax rise 6% + and inflation is alledgedly at 2%.

shirlgirl2004

At the moment the 0.5% cut is good as most of our money is going into OP the mortgage. We are on a tracker .49% above BBR. Come April when we'll be mortgage free it'll become a bad thing as our savings will get appalling rates. I am tempted not to pay off the mortgage and stash the cash at higher interest rates whilst we can, but to have the security of knowing no-one can take your home would be great.

Kenny4315

Sometimes it better to have a pile of cash and a mortgage, rather than no mortgage and but no cash.

Depends on the opportunities around, and the cost of the debt/tax/etc, at present zero opportunities but there will be in time. I like to keep an opportunity slush fund in CASH or near cash equivalents. If you have the cash as long as you don't blow it on cr*p then there is no house issue.

Really2

Snarf999 wrote: »

I'm not sure fixed rates will do this though. They're already higher than when we fixed 2 years ago when interest rates were much higher. I think ad9898's advice is more realistic. Getting onto a Tracker or SVR now just because rates are low means a short term gain, however as soon as interest rates stabilise or start to rise again I think fixed rates may be harder to come by or will just increase with the bank and BS lenders with an eye on where rates might be headed.

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It is up to you but fixed rates will come down and going on to a SVR would not cost you a penny and save you money but its up to you. I am looking to switch to a 10Y fixed when I think the rates are low enough but I think that rate needs to be below 4%.

IveSeenTheLight

skap7309 wrote: »

FTBer - hence no mortgage. Deposit (i.e. savings,) yes.

Ok, I don't understand what you have offset your savings / deposit against then

Really2

Old_Slaphead wrote: »

Still can’t resist it can you?

The problem most businesses have is getting credit.

The decrease in interest rate does not have a material effect on most companies overheads – given the huge increase in fuel costs in 2008/9, proposed NI increases in 2010, cost of funding pension shortfalls, cost of minimum wage over last few years etc etc.

Ultimately, the only person who spends money is you, Joe Public, the consumer (or Government).

The reason why the BoE has reduced interest rates is to try and get the consumer spending again – it’s not, as you seem to think, about reducing the odd percent off of a company’s overheads.

But reducing interest rates simply moves wealth from 1 group of people (ie savers) to another (ie borrowers). If the latter group, because of lack of confidence, uncertainty or whatever, decides to reduce their debts rather than increase spending then it makes absolutely no difference to the economy. Many mortgage holders will use their windfall to pay down their debts. Many savers will still not go out and spend - it's not in their nature, they're a cautious lot.

Reducing interest rates hasn’t worked so far in the UK or USA.

Reducing interest rates didn’t work in Japan in the last decade.

The blokie from Nissan said on TV tonight – it’s not high/low interest rates that are the problem it’s the lack of credit and lack of confidence (of consumer to go out and spend) !! The Gov't needs to reduce state spending and encourage & incentivise the manufacturing/skill sector. More skilled trades and less emphasis on universities courses on nebulous and oversupplied subjects like legal & media studies, golf course management etc etc.

The current interest rate policy doesn’t work. The Gov’t have increase banks Tier 1 capital requirements which effectively inhibits their ability to lend money. It then bales them out and expects them to pay 12% for the priviledge. They need to make a decent profit to pay taxpayer back so they’re unlikely to want to pass on interest rate falls if they can get away with it!

THe Labour Government, because of their deliberate policy of keeping interest rates low and encouraging excessive consumerism and asset price inflation must bear significant responsibility for getting us into this mess - they now ought to come up with some innovative ways of getting us out of it.Of course, that won't happen - in a few years they'll all sail off into the sunset with their inflation -proof, gold plated pensions, lucrative after dinner speaking engagements and/or their seats firmly wedged their big-company, non-executive directors' chairs.

So high interest rates will sort it and will make companies better off?:rolleyes:
Or just you as a saver?

If low rates are not working why do the US and Japan keep with them (Japan the last 13 years) and not just put them up to 10% say?
Lets bow down to your "superior knowladge" as you put it earlier to me (obviously not sarcastic were you;) )
ps I agree on your education bit I think there should be more skilled workers and drades men in the UK. Do 2/3rds of children go to university now but do 2/3rds of jobs need a degree? No wonder they are depressed the degrees they do mean virtualy nothing now.

RainMaker_2

I don't think savers have much to complain about. The absolute savings rate isn't important, it's the rate relative to inflation that matters. E.g, savings rate at 5%, inflation running at 5%, is exactly the same as a savings rate of 1% with inflation running at 1%.

CPI is dropping like a stone, and may actually go negative this year, hence reducing interest rates.

Really2

RainMaker wrote: »

I don't think savers have much to complain about. The absolute savings rate isn't important, it's the rate relative to inflation that matters. E.g, savings rate at 5%, inflation running at 5%, is exactly the same as a savings rate of 1% with inflation running at 1%.

CPI is dropping like a stone, and may actually go negative this year, hence reducing interest rates.

Spot on mate.:beer:

MrDT

Really2 wrote: »

It is up to you but fixed rates will come down and going on to a SVR would not cost you a penny and save you money but its up to you. I am looking to switch to a 10Y fixed when I think the rates are low enough but I think that rate needs to be below 4%.

I can't see sub 4% fixes (of any worthwhile length i.e. 5 years+) being available anytime soon. Rates won't stay low for long, and if anyone knows that, it's the banks.

If I was in your position and a long term fix of 5% was made available in the next year I'd snatch the lenders hand off.

I could be wrong, but sub 4% fixes don't seem realistic in the least to me.

Really2

MrDT wrote: »

I can't see sub 4% fixes (of any worthwhile length i.e. 5 years+) being available anytime soon. Rates won't stay low for long, and if anyone knows that, it's the banks.

If I was in your position and a long term fix of 5% was made available in the next year I'd snatch the lenders hand off.

I could be wrong, but sub 4% fixes don't seem realistic in the least to me.

I think they will in the future. but I am on a .49 lifetime traker no need to make any hasty moves for me.;)