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When will interest rates go up again?
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All of a sudden the targeted measure now seems to be the RPI which is at 0.1%. Inflation of food items is still high at 10%, and QE could have a disastrous impact the exchange rate...
It gets better and better.
Well there has been no official change of policy. According to the BOE they are still well OVER target.The inflation target
The inflation target of 2% is expressed in terms of an annual rate of inflation based on the Consumer Prices Index (CPI). The remit is not to achieve the lowest possible inflation rate. Inflation below the target of 2% is judged to be just as bad as inflation above the target. The inflation target is therefore symmetrical.
If the target is missed by more than 1 percentage point on either side – i.e. if the annual rate of CPI inflation is more than 3% or less than 1% – the Governor of the Bank must write an open letter to the Chancellor explaining the reasons why inflation has increased or fallen to such an extent and what the Bank proposes to do to ensure inflation comes back to the target.0 -
I hope they never go up. I am paying less than half the mortgage I was paying a year ago. Go Gordon, I love you!! YayWhen the bloody hell is nelly coming back?0
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Interesting.
Its very worrying when you think that we are already running a ~9% deficit, and the proverbial !!!!!! hasn't hit the fan yet. What happens when unemployment hits 3M?
It doesn't bear thinking about really.
If there is a run on the pound as a result do you think its likely to happen quite fast or happen over a few weeks?
If there is a proper run on the pound due to investors losing faith in the UK Governments ability to repay its debt except by using devalued currency I would expect a gentle build up and then a very rapid decline over a couple of days or so.
The thing to watch is yields on long dated Gilts vs short dated ones.0 -
Although interest rates main remain low, borrowers may well find themselves paying for the bail of the FSC. Yesterday I received the annual accounts of our lender the Hinckley & Rugby Building society. An extract from the Chairman's statement below.There has been no need for any Government bailout in the building society sector but societies have nevertheless been called upon to pay a significant share of the cost of bailing out failed institutions in the banking sector through the Financial Services Compensation Scheme (FSCS). The cost to the Society of the FSCS levy stands at £0.4m in 2008 and is expected to total a further £1.0m over the next two years.
The Society’s Board of Directors firmly believes that the funding of the FSCS needs to be revised so that institutions that are operated with concern for their long term security are not the first port of call to finance the rescue of less prudently run financial institutions. The Society has always carefully managed its exposures to other financial institutions and is pleased to confirm that it held no funds with any of the banks that failed in 2008.
Within the directors report to the accounts. There is a further statement to say that the cost of funding the higher levy to the FSCS will be factored into the interest rate borne by borrowers. As mutual building societies are being required to fund 20% of interest costs and 20% of capital shortfall to meet the liabilities of failed institutions such as Bradford & Bingley and the Icelandic banks.
Looks like the days of "cheap" mortgage finance will disappear for the foreseeable future.0 -
Graham_Devon wrote: »I have been predicting 0% for about 7 months now to much scorn from a fair few. My predictions will still be up as they were on this forum, in my post history somewhere.
I also predicted the FTSE will bottom out at 2200 somewhere in this recession / depression. Which I still stand by.
Tories will come in, they can't just put them up instantly, so will take 2-6 months. Then we should see a gradual increase to around 8% for the next few years.
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Hope that is in your manifesto
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
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I hope they never go up. I am paying less than half the mortgage I was paying a year ago. Go Gordon, I love you!! Yay
Another brainwashed.
Go Gordon? Apparently he has nothing to do with the interest rates. When they go up, he simply says the BOE is independant. When they go down, he says he is working hard and doing things and makes it seem he has decreased interest rates.
His brainwashing, quite obviously, works.0 -
Thrugelmir wrote: »Within the directors report to the accounts. There is a further statement to say that the cost of funding the higher levy to the FSCS will be factored into the interest rate borne by borrowers. As mutual building societies are being required to fund 20% of interest costs and 20% of capital shortfall to meet the liabilities of failed institutions such as Bradford & Bingley and the Icelandic banks.
Looks like the days of "cheap" mortgage finance will disappear for the foreseeable future.
Very interesting. So the bank failures are going to have broader implications across the entire mortgage sector -- magnifying the impact of the credit crunch.0 -
Graham_Devon wrote: »Another brainwashed.
Go Gordon? Apparently he has nothing to do with the interest rates. When they go up, he simply says the BOE is independant. When they go down, he says he is working hard and doing things and makes it seem he has decreased interest rates.
His brainwashing, quite obviously, works.
so if someone is doing ok due to the economic climate - it must mean that they are brainwashed. great argument :cool:
do you not welcome people who are doing ok or support the current government in this economic climate?0
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