LIBOR still dropping...

dannykos

let's move on...

interesting info from inside the ropes – thanks (keep us posted)

inspector_monkfish

3mth Libor down a tic to 1.58438

cbrpaul

There are some who say low rates are prolonging the recovery !!

One thing is for sure when rates start to rise , I think they will rise quite fast , settle at at around 4% to 5 %, and you can bet the banks will pull the good deals before you get a chance to nab them when they do rise !!

luckyfool

WestonDave wrote: »

Inspector - your insight is welcome (well to me at least - and I can see beyond the blame it all on the bankers spin!).

I'm currently on a SVR offset and for specific circumstances would prefer to stay on an offset - the fixed rates offered on those are either high rates or short duration (2 years) so at the moment I'm crossing all extremities and sticking as I am for the time being. However the recent withdrawl of some good 5 year fixes is an interesting move which I'm interpreting at the moment as being due to a specific pool of funds being exhausted rather than a general race to increase rates.

It is possible to fix for 5 or 10 years with some pseudo offset type features ( e.g. Northern Rock flexible fixed rates allowing unlimited overpayments and borrow back at the same rate). Unfortunately they have changed the terms recently so taking the money back out is not quite as quick/straightforward, however its still worth considering.

inspector_monkfish

cbrpaul wrote: »

There are some who say low rates are prolonging the recovery !!

One thing is for sure when rates start to rise , I think they will rise quite fast , settle at at around 4% to 5 %, and you can bet the banks will pull the good deals before you get a chance to nab them when they do rise !!

i beg to differ.

BOE will only raise rates at 0.50% at the most at a time.

they are not going to start raising by 1 or 2pct suddenly.

luckyfool

inspector_monkfish wrote: »

i beg to differ.

BOE will only raise rates at 0.50% at the most at a time.

they are not going to start raising by 1 or 2pct suddenly.

Based on what? Practice of the MPC prior to the recent rate cuts?

When rates were being cut recently there was an emergency cut of 1%, and the BofE chief economist has said in the last couple of weeks that if necessary to control inflation they will increase rates just as quickly as they cut them. It is easy to foresee circumstances where they need to increase rates relatively quickly by 0.5-1% at a time.

inspector_monkfish

luckyfool wrote: »

Based on what? Practice of the MPC prior to the recent rate cuts?

When rates were being cut recently there was an emergency cut of 1%, and the BofE chief economist has said in the last couple of weeks that if necessary to control inflation they will increase rates just as quickly as they cut them. It is easy to foresee circumstances where they need to increase rates relatively quickly by 0.5-1% at a time.

based on hindsight, and the fact that BOE never ever want to give the impression that they are panicking again.

any future rises will be in no larger increments than 50bp.

cbrpaul

inspector_monkfish wrote: »

i beg to differ.

BOE will only raise rates at 0.50% at the most at a time.

they are not going to start raising by 1 or 2pct suddenly.

I will re-visit your post in 6 months time , lets see whos right

inspector_monkfish

roll on October 7th...;)

cbrpaul

give or take a few weeks :rotfl: