Interest rate lowered to 0?

YoungSaver20

I can see the interest rate being lowered to 0 % (hopefully no further cuts) but do you think that is likely to happen next week or will it take a few months? It's possible it wont fall to 0 but I think it will.

Aegis

Personally I think it's unlikely that they will cut the interest rate to zero. I think they'll try out quantitative easing for a few months to see what that does and change the interest rates again somewhere in late Q2 or Q3.

Just a gut feeling, mind!

TroJon

There is only so much reduction after reduction etc. can do. Clearly it's not done too much in the current state of affairs. If they took it to 0% it would also mean less income to the financial companies, which has a big chain reaction on us all.

I think quantitive easing will be checked out, not sure if they will bring in more, but more likely stall and wait a bit, as it seems as though the credit front is picking up, and it's pretty pathetic to try and save money with interest with 0.5% anyway!

chopperharris

I dont think it will , it could reach .1 then quarterly rises of .1 from then on to stem off a hyperinflation spurt.

If I can liken the economy to a submarine for a second thats dead in the water and letting in .

They have tried kickstarting the engine , that wont work.(reduced interest rates and vat).IF theres no one buying then theres less work and the reverse is true -if there no one working etc.

Tried finger in the hole to stop more water getting in , that didnt work.(releasing credit by supporting banks , then toxic garunteed scheme).The banks wont lend credit the way they did for a v long time , to encourage(see force) them to do so is stupid as it is the reason why it happened in the first place.

Now its time to seal up the leaking compartments and sacrifice some crew to save the rest.(redundancies , reduced pay , legislation of markets and banking).

I do think that the right actions have been done though , its battlefield triage , its the financial version of the sticking plaster conundrum.

The credit crisis is world war 2.5 but this time the enemy is our economy , its now rations , nylons for favours and dig deep for victory.

malik999

YoungSaver20 wrote: »

I can see the interest rate being lowered to 0 % (hopefully no further cuts) but do you think that is likely to happen next week or will it take a few months? It's possible it wont fall to 0 but I think it will.

I don't think it will. We will see who is right

ManAtHome

To summarise Chopper - they're p i s sing in the wind...

Savings rates have been creeping back up (banks etc desperate for the cash), long-term Gilt yields also tracking up (higher inflation on the horizon) - don't fix savings for too long (or mortgages for too short)...

Andrew64

It could be cut to 0.25%, then we'll be the same as the US and Japan.

opinions4u

0% or 0.5% makes little difference.

Banks will look to regain margins lost in the last 18 months if there's a cut, so few businesses or personal customers would see an improvement in terms.

They've thrown the kitchen sink at it.

Now they need to give it time to work.