BoE's Kate Barker - Rates could stay low for some time

bendix

Really2 wrote: »

Well I have a lifetime BOE tracker that is offset so actual your are quiet wrong, has my savings and mortgage are directly linked.

We have hit the interest rate denial stage,
"They are going through the roof i tell thee. No mater base rate will be low mortgages will be 17% for the next 100,000 years."

Has no one asked who the hell is taking out a 2 or three year fixed rate at the moment.

Fair enough, but lifetime BOE trackers are not what 99% of the population has. Nor do their credit card bills or HP bills reflect BofE rates.

Noone is suggesting retail mortgage rates are going through the roof but logic suggests that they will rise, and relatively substantially. A flood of money in the market, inflationary pressures, an economy which is likely to start picking up next year .. . . . . coupled with the fact that they can't really go lower.

People have very short memories. I wonder if it's because so many borrowed so much at such low rates and are currently stretched, and don't dare face up to what they've done?

inspector_monkfish

bendix wrote: »

inspector_monkfish wrote: »

to be fair though, if all the lenders started hiking rates left right and centre, whilst BOE remained the same, they would soon start losing customers who suddenly see some competition back in the market

there will always be those that don't follow the others, and leave rates low, possibly attracting new customers

QUOTE]


Can you explain why credit card companies seem to be sitting comfortably at rates in the mid to high teens then?

yes.
quite simply, because when base rate was around 5%, credit cards were charging high teens to low twenties !!

bendix

Actually, I am going to say that for SOME people, they will go through the roof. For people paying interest only (and there is a hell of a lot of them) on mortgages with tiddly 2-3% interest rates think their repayments won't double within 2-3 years, they are sadly mistaken.

I call a 100% increase 'going through the roof'

Really2

bendix wrote: »

Noone is suggesting retail mortgage rates are going through the roof but logic suggests that they will rise, and relatively substantially. A flood of money in the market, inflationary pressures, an economy which is likely to start picking up next year .. . . . . coupled with the fact that they can't really go lower.

i have no doubt base will go up the difference between fixed rates and base will start to decrease.

When the economy is picking up if BOE base was 5% you will get a fix of around 5.49%

Do people think this disparity will stay for ever.

You are right about short memory's, when rates go up the disparity will decrease as the crisis will be over.

thescouselander

It seems like all the indicators are pointing to the base rate staying low for the moment. Surely an increase in the base rate will be preceeded by an end to "quantitive easing". An increase in base rate while the BOE is still engaged in quantitive easing wouldn't make sense and would be self defeating. Last I heard the BOE was printing money as fast as ever.

Now we hear from a member of the MPC that rates are likely to stay low - its all pointing one way.

The talk of imminent interest rate hikes looks increasingly deluded.

bendix

inspector_monkfish wrote: »

bendix wrote: »

yes.
quite simply, because when base rate was around 5%, credit cards were charging high teens to low twenties !!

Oh dear oh dear. BofE rates at historic lows, falling and static. Credit card interest rates on the rise.

Try again.

http://www.channel4.com/news/articles/business_money/credit+card+rates+average+over+18/3193892

Really2

bendix wrote: »

Actually, I am going to say that for SOME people, they will go through the roof. For people paying interest only (and there is a hell of a lot of them) on mortgages with tiddly 2-3% interest rates think their repayments won't double within 2-3 years, they are sadly mistaken.

I call a 100% increase 'going through the roof'

I am IO, current payment is £138 I then overpay £1000 in to my offset so paying the equivalent of around 6%

You say 99% are not on low rates then you are saying their payments will double.

Sorry their is poor logic going on here. Rates of over 6% are not even being called, I would say your average 75% LTV mortgage will be lower than 6% for the next 5 years +.

PS what inflationary invironment?

inspector_monkfish

bendix wrote: »

inspector_monkfish wrote: »

Oh dear oh dear. BofE rates at historic lows, falling and static. Credit card interest rates on the rise.

Try again.

http://www.channel4.com/news/articles/business_money/credit+card+rates+average+over+18/3193892

Wow. That just shows what shysters the credit card companies are!
And they seem to have no shame either.
Must admit, it isn't something I really ever have to follow, as I am sensible enough to have no credit card debt.;)

I have a Tesco Credit Card, but I couldn't even tell you what the rate is, as I pay it off every month, and bank the Clubcard points!!:D

Thrugelmir

bendix wrote: »

Fair enough, but lifetime BOE trackers are not what 99% of the population has.

and for those of us who are lucky enough to have this product. :j

Somebody else is having to foot the bill by paying a higher rate on their mortgage or receive lower interest on their savings. ( My mortgage is through a small Building Society who are dependent on depositors to fund lending).

The last BOE report I believe suggested rates could remain low until 3rd quarter of 2010.

Really2

Thrugelmir wrote: »

Somebody else is having to foot the bill by paying a higher rate on their mortgage or receive lower interest on their savings. .

But surely that is the risk? Some still have savings accounts at over 5% you could argue they are pushing up peoples mortgages.:)

Surely the idea of interest means you should be savy and adjust to the market direction.