Interest rates

Pobby

Just interested to hear what others think on this point. Now that we are at a 300 year low on IRs, how long do you think that they will be back to 5% plus?

Personally I see that this reduction is down to the fact that Crash and Co. need to stick a band aid rapidly on the economy and attempt, and doing that rather poorly, stop the economy totally coming to a halt.

Dan:_4

They will stay low for as long as the recession lasts.

Pobby

Dan: wrote: »

They will stay low for as long as the recession lasts.

Hmmm, think you may well be right. A very different attitude to Thatch and her lot that really rammed them up last time around.

Dan:_4

Circumstances were different in thatch's era. This recession has came about because of the credit crunch so it makes sense to keep them low for the time being. Saying that, if (when) the Tories get in next year, who knows...

ManAtHome

Not too sure about the sense of trying to hit the same IR level as the US which has the advantage (for now..) of having the world's trading currency. At some point in the next couple of years the rest of the world may remind us we can't "send the gunboats in to sort out them pesky foreigners" (or maybe they'll continue their "stuff the private sector" tactics by forcing pension funds to buy the ever-increasing supply of Gilts).

Low rates would be a good thing if they were actually feeding through to business - not sure who (apart from people with tracker mortgages) they are helping at the moment though.

dealsearcher

Previous recessions bear little resemblence to the present recession. The global economy has ensured this one is worse then any before. The advantage we have now is that it can be dealt with far more rapidly than before.

The main problem is whether governments around the world are in fact doing the correct things or are they just giving the appearance of doing things? Certainly the UK government have thought up some measures but many are either taking forever to be put in place or are ineffective, or both.

If the measures being put in place turn out to be ineffective then we will have a depression worse than the 1930's because the banks and markets around the world are now all interconnected.

fc123

It's times like these that we really need Generali to have time to post.

I want to to know the answer to this too. I might post a Q on Gens blog instead. BTW I have had a drink so my typing might be totally $hi77

themanbearpig

I worry that they will avoid raising them because they have set 2006/7 levels of consumption as the benchmark. This as we know was totally unsustainable.
Maybe it will take 10 years to reach that level again, or maybe this year if the money printing business works.

Staying on low interest rates has major disadvantages for the country, but raising them creates as many problems. Its a lose-lose situation.

Gorgeous_George

The longer low rates stay around the better.

I'm taking the opportunity to reduce my mortgage and a few years at 1.24% should see the back of it forever.

If rates are still low in September 2010 I might treat myself to a new car.

If I knew what was going to happen with rates, I'd be too busy to post here.

GG

whathavewedone

Interest rates were high in Thatcher's time because we had high inflation. We might have high inflation again fairly soon but we dont't have it now.

I have no idea when interest rates will go up or by how much. If I'd known they would go this low I'd never have taken out a 3 year fixed rate mortgage in October 08.

Actually, given that I'm not that lucky a person I would say that interest rates will stay low for the duration of my fixed rate mortgage and will begin climbing above 5% as soon it comes to an end.

So my money's on end 2011.

chucky

repay as much mortgage debt as possible during low rates for my tracker mortgages.

when higher rates go up it will be more difficult if inflation ever kicks in - until then it's good to prepare yourself financially just like some have prepared themselves for the current downturn.