How long at 0.5%

Dithering_Dad

I'm hoping that rates will stay the same until April 2010 when my current deal runs out and I can arrange a fixed rate. I'll probably go for a 5 year fix with an aim to have my mortgage paid off by the end of that term.

I think that a lot of people have forgotten what rates were like before Labour and the banks gave us the cheap credit fuelled decade of low rates. Well they got burned badley doing that and we'll have a return to normal rates around the 7 to 8 percent mark. We will have a period at a much higher rate than the 'norm' which will be double digit IMHO.

If you're thinking or buying in the next 18 months or remortgaging in the next 12 then I'd suggest buying within the next 6 months and remortgaging ASAP with a long-term fixed rate mortgage!!

inspector_monkfish

ad9898 wrote: »

If QE feeds through and pushes up inflation, could be 10%+

:rotfl::rotfl::rotfl:

Dithering_Dad

inspector_monkfish wrote: »

:rotfl::rotfl::rotfl:

lol, first time I've ever 'quoted' smilies.How about sharing the joke with the rest of us?

I assume you don't think we'll see double digit interest rates? Can I ask what your views are, and why you think interest rates will remain low?

inspector_monkfish

Dithering_Dad wrote: »

lol, first time I've ever 'quoted' smilies.How about sharing the joke with the rest of us?

I assume you don't think we'll see double digit interest rates? Can I ask what your views are, and why you think interest rates will remain low?

i extremely doubt we will ever see rates that high again
one major reason, i believe, is the embarassment factor....

if rates get that high, it'll be because BOE or the government have c0cked something or several things up somewhere along the line

if any signs appear that rates may be heading that high, they will do all in their power to prevent it

believe me, they really do not want to put themselves in the position again of making themselves look so dumb and embarassed

WhiteThierry

inspector_monkfish wrote: »

i extremely doubt we will ever see rates that high again
one major reason, i believe, is the embarassment factor....

if rates get that high, it'll be because BOE or the government have c0cked something or several things up somewhere along the line

if any signs appear that rates may be heading that high, they will do all in their power to prevent it

believe me, they really do not want to put themselves in the position again of making themselves look so dumb and embarassed

true, i think they've already proven that they'd rather let house prices spiral out of control than raise interest rates too high

Dithering_Dad

inspector_monkfish wrote: »

i extremely doubt we will ever see rates that high again
one major reason, i believe, is the embarassment factor....

if rates get that high, it'll be because BOE or the government have c0cked something or several things up somewhere along the line

if any signs appear that rates may be heading that high, they will do all in their power to prevent it

believe me, they really do not want to put themselves in the position again of making themselves look so dumb and embarassed

From the people who brought us "no more boom and bust", the same people who plainly saw that the housing market was getting out of control yet did nothing about it? The ones who allowed our banks to have a run on them before they got involved. The ones who sold our Gold reserve at record low prices (after announcing their intention to do so)? I wish I had your confidence in politicians, especially ones who are approaching an election and are unlikely to put interest rates up and hurt a greater part of the electorate.

I personally believe that many other countries will recover faster than the UK, it's already happening in the US economy, and as these country's start getting back to work demand for raw materials and energy will start to go up. As we're not a net exporter of Gas and Oil anymore, their demand will put cause prices to rise - we will see inflation increase, while at the same time our government will want to keep rates down to try to pull us out of recession. They can't raise them in time to control inflation because they will be afraid of pushing the UK back into recession or at the very least cause a delay in the recovery.

By the time they turn their attention to inflation it will already be too late in the day to prevent it, so all they will be able to do is to try and control it - how? by raising interest rates.

You'll also find that the 'normal' interest rates you've enjoyed over the past decade were actually fuelled by a lot of very cheap credit flooding into the financial system - virtually bankrupting the banks. This cheap credit is still flooding the market in the form of QE - our tax money in other words. Eventually the cheap credit tap will be turned off by the government, banks won't be allowed to turn it back on due to a combination of having their fingers burned and much tighter legislation.

We'll therefore see a return to 'normal' interest rates around the 7 to 8 percent - once the government have gotten inflation under control with rates of 10 to 12 percent.

Don't you agree?

lostinrates

inspector_monkfish wrote: »

believe me, they really do not want to put themselves in the position again of making themselves look so dumb and embarassed

I wish I could believe this..but...really, embarrassement has plagued the government on many, many issues...and will do again before interest rates need to rise, so whats one more thing...especially something that can be palmed off as response to a global problem, or perhaps more interestingly a previous government.

Wookster

inspector_monkfish wrote: »

i extremely doubt we will ever see rates that high again
one major reason, i believe, is the embarassment factor....

if rates get that high, it'll be because BOE or the government have c0cked something or several things up somewhere along the line

if any signs appear that rates may be heading that high, they will do all in their power to prevent it

believe me, they really do not want to put themselves in the position again of making themselves look so dumb and embarassed

I'm sure someone said that about Iceland where interest rates are now 18%.

inspector_monkfish

Dithering_Dad wrote: »

From the people who brought us "no more boom and bust", the same people who plainly saw that the housing market was getting out of control yet did nothing about it? The ones who allowed our banks to have a run on them before they got involved. The ones who sold our Gold reserve at record low prices (after announcing their intention to do so)? I wish I had your confidence in politicians, especially ones who are approaching an election and are unlikely to put interest rates up and hurt a greater part of the electorate.

I personally believe that many other countries will recover faster than the UK, it's already happening in the US economy, and as these country's start getting back to work demand for raw materials and energy will start to go up. As we're not a net exporter of Gas and Oil anymore, their demand will put cause prices to rise - we will see inflation increase, while at the same time our government will want to keep rates down to try to pull us out of recession. They can't raise them in time to control inflation because they will be afraid of pushing the UK back into recession or at the very least cause a delay in the recovery.

By the time they turn their attention to inflation it will already be too late in the day to prevent it, so all they will be able to do is to try and control it - how? by raising interest rates.

You'll also find that the 'normal' interest rates you've enjoyed over the past decade were actually fuelled by a lot of very cheap credit flooding into the financial system - virtually bankrupting the banks. This cheap credit is still flooding the market in the form of QE - our tax money in other words. Eventually the cheap credit tap will be turned off by the government, banks won't be allowed to turn it back on due to a combination of having their fingers burned and much tighter legislation.

We'll therefore see a return to 'normal' interest rates around the 7 to 8 percent - once the government have gotten inflation under control with rates of 10 to 12 percent.

Don't you agree?

Its the Bank of England that decide whether rates go up or down, not the politicians.

I think you will find the US economy is still (to quote from Snatch) proper ph u cked !

No, I don't agree.

inspector_monkfish

Wookster wrote: »

I'm sure someone said that about Iceland where interest rates are now 18%.

haha, maybe they did (think he owns west ham now )
but you cannot compare Iceland with UK

Also, the Icelandic base rate is only 13%
(quite a bit better than 18%, but still shocking)