BOE Base Rate to be at 0.5% until end of Q2 2010

Graham_Devon

inspector_monkfish wrote: »

dont get too carried away chaps, its just a poll !!

I reckon it's a poll that will turn out to be quite correct though, and if wrong, won't be far wrong (i.e. they may be 1% only at quarter 2).

I firmly believe it all relates to the election. And that would be right for after the election.

I believe is Labour won it again rates would go up, and that if the tories get in, rates will go up. I do not believe the "independance" of the BOE is actually all that independant, as Brown is quite happy to claim HE and his party have helped people with interest rates.

Harry_Powell

If BoE rates are staying the same, then why are bank fixed rates starting to rise?

Is it the case that they know something, or are they just profiteering?

inspector_monkfish

Harry_Powell wrote: »

If BoE rates are staying the same, then why are bank fixed rates starting to rise?

Is it the case that they know something, or are they just profiteering?

they know nothing - its just called shafting !!

chucky

Harry_Powell wrote: »

If BoE rates are staying the same, then why are bank fixed rates starting to rise?

Is it the case that they know something, or are they just profiteering?

two possible reasons that i can see:

1. They thinked fixed rates are going to increase in the future (3-7 years)
2. The tranches of fixed rate money that they've offered has sold well and they want to make a bit more profit in the next offering as they believe the demand is there.

it's a combination of the two i think

Snooze

Graham_Devon wrote: »

I reckon it's a poll that will turn out to be quite correct though, and if wrong, won't be far wrong (i.e. they may be 1% only at quarter 2).

I firmly believe it all relates to the election. And that would be right for after the election.

I believe is Labour won it again rates would go up, and that if the tories get in, rates will go up. I do not believe the "independance" of the BOE is actually all that independant, as Brown is quite happy to claim HE and his party have helped people with interest rates.

Yep, exactly my script on it too. Nothing to see here, just politics in play.

Rob

Thrugelmir

Harry_Powell wrote: »

If BoE rates are staying the same, then why are bank fixed rates starting to rise?

Is it the case that they know something, or are they just profiteering?

In simple terms , the banks don't borrow at BOE base rate.

I'm a Company with £50 million to deposit for 18 months. I will ring all the major banks and ask for their best rate.......

That's the sort of funding which supports your mortgage.

inspector_monkfish

Thrugelmir wrote: »

In simple terms , the banks don't borrow at BOE base rate.

I'm a Company with £50 million to deposit for 18 months. I will ring all the major banks and ask for their best rate.......

That's the sort of funding which supports your mortgage.

at current money market levels, if you rang me to deposit £50mio, I would pay you around 1.25pct for 12mths (we dont take straight cash deposits over 1year) compared to BBA LIBOR of 1.6925 currently. LIBORs are even too high compared to the real market.

other banks may pay higher, if they have a special need for it....

Thrugelmir

inspector_monkfish wrote: »

at current money market levels, if you rang me to deposit £50mio, I would pay you around 1.25pct for 12mths (we dont take straight cash deposits over 1year) compared to BBA LIBOR of 1.6925 currently. LIBORs are even too high compared to the real market.

other banks may pay higher, if they have a special need for it....

Is your bank retail or investment or both?

inspector_monkfish

Thrugelmir wrote: »

Is your bank retail or investment or both?

we are a japanese Bank
in Japan we are the equiv of the UK clearers over here.

we get involved in a bit of both really
but here on the small desk i work, its just cash money markets and arbitrage