When will interest rates go up again?

penguine

At what point in this recession will the BoE need to start putting the base rate up again? And could it go as high as it did in the 1990s recession?

kier333

2-3 Yrs 7%

Pobby

kier333 wrote: »

2-3 Yrs 7%

As high as that?

kier333

Its not really high 7%

purch

2-3 years 1%

We won't get off that lightly !!!

This Depression will run and run !!!!

Pobby

kier333 wrote: »

Its not really high 7%

No of course it`s not, silly me. If I am correct the average was a little over 8% for years. I guess that I have got into a mind set of earning diddly squat on my savings.

Anyway, wouldn`t fancy sitting on a large mortgage when that happens.

Really2

Acording to the BOE they see inflation near 0% untill 2012. Cant see them putting up rates if inflation is going to be below 2%.

I think we will be looking somting like near 0% for the next 2-3 years. Most probably not looking over 4% in 5-10 years.

or even somthing like Japan.

StevieJ

purch wrote: »

2-3 years 1%

We won't get off that lightly !!!

This Depression will run and run !!!!

What depression ?

Thrugelmir

penguine wrote: »

At what point in this recession will the BoE need to start putting the base rate up again? And could it go as high as it did in the 1990s recession?

The BOE could lower the base rate at 0% for an extended period of time. As the economy may well take some time to turn round. We could well see low base rates for a couple of years.

I guess that there is an underlying question behind your question.

However retail lenders will need to attract deposits to fund mortgages for example. So will need to offer savers a positive rate however low, and new borrowers will be charged a rate some 2 to 4 % above base rate.

The difference to previous times is that we are in a deflationary enviroment. Although interest rates are low, inflation linked payrises will mean that debt is no longer eroded in real terms. As house price rises will be capped by peoples ability to borrow larger sums.

Dithering_Dad

My current mortgage deal ends in April 2010 and then I'll be arranging a 5 year fixed rate, where I will fix the repayments so that the mortgage is cleared at the end of the 5 year period.

Bascially we need interest rates to stay low for another year and 2 months.

purch

What depression ?

The one that we are in, and that'll last a decade or more.

Also the depression that will come over all the Hyper-Inflation Hawks when they see all their carefully laid plans go up in smoke cos it never arrives.