Rates down by some banks and building societies

tellyerworraldowivyer

I have mentioned on another board about banks and BS's dropping some of their savings rates, the base rate has not budged since last year, anyone else find this a swizz?

ManAtHome

LOL - welcome to the world of corporate (and mutual) greed... Haven't seen any of them advertising "voted best for savers" always "voted best mortgage providers". In fact you (and me) are probably a bit of an embarassment when they can borrow from Japan (for the moment) at a couple of percent.

Personally I don't check rates every week, and even moving cash around can be a bit neutral (when new provider cuts rates "due to market conditions") but at least gives them a bit of havoc in the planning department (or it would if everyone did it).

Oh, and don't forget to return your voting form - I habitually vote against anything they propose these days (again, if everyone did this...).

Ted_Bloke

ManAtHome wrote:

Personally I don't check rates every week, and even moving cash around can be a bit neutral (when new provider cuts rates "due to market conditions") but at least gives them a bit of havoc in the planning department (or it would if everyone did it).

Yeah, if a lot of ppl did that it would create more of a market sending real signals and at least reward or motivate being the last to drop and the first to raise rates.

Deemy

Don't worry the rates will rise again soon enough

By the end of 2006, regardless of what the BOE does rates will be well back above 5%

Milarky

Deemy wrote:

Don't worry the rates will rise again soon enough

By the end of 2006, regardless of what the BOE does rates will be well back above 5%

Can you elaborate on that a bit Deemy?

US rates (4.75%) are now above UK's (4.5%) with further rises in the pipeline there. Much more modest increases are occurring in other currencies at the same time (Euro rate is now 2.75%). Yes the UK looks isolated with its rates on hold for 8 months since the first reduction from the 4.75% 'top' - where it had been for exactly a year - but that indicated to me that the BOE MPC is very, VERY conservative about making rate changes - the're not prepared to to cut it one month and admit they should have left or put it up a month later.

My query is about how those 'background' movements in foreign currencies interest rates would filter through to our 'high street' savings account rates - which seem to take their lead from - and are often linked to - the BOE rates?

What's to stop banks holding rates until the BOE finally moves them up (given it is likely to leave them level for longer anyway) rather than increase those rates in anticipation of such a move? Banks often cut rates in anticipation of future BOE reductions - but that suits them surely?

Are they looking to their lending then? If the cost of borrowing outside the UK is already rising are the banks having to raise mortgage rates now rather than when the BOE finally signals a change? And to do that will they have to make UK savings look attractive to foreigners with higher rates which somehow (I can't see how exactly) filter through to high street rate?

Are we looking at UK variable mortgage rates of 6-7% then?

free4440273

we will see rates rise above 5 per cent in 2007 - possibly between 6-7.5 percent. hopefully, even higher.
http://forums.moneysavingexpert.com/showthread.html?t=157180&page=6&pp=10

Deemy

Milarky wrote:

Can you elaborate on that a bit Deemy?

US rates (4.75%) are now above UK's (4.5%) with further rises in the pipeline there. Much more modest increases are occurring in other currencies at the same time (Euro rate is now 2.75%). Yes the UK looks isolated with its rates on hold for 8 months since the first reduction from the 4.75% 'top' - where it had been for exactly a year - but that indicated to me that the BOE MPC is very, VERY conservative about making rate changes - the're not prepared to to cut it one month and admit they should have left or put it up a month later.

My query is about how those 'background' movements in foreign currencies interest rates would filter through to our 'high street' savings account rates - which seem to take their lead from - and are often linked to - the BOE rates?

What's to stop banks holding rates until the BOE finally moves them up (given it is likely to leave them level for longer anyway) rather than increase those rates in anticipation of such a move? Banks often cut rates in anticipation of future BOE reductions - but that suits them surely?

Are they looking to their lending then? If the cost of borrowing outside the UK is already rising are the banks having to raise mortgage rates now rather than when the BOE finally signals a change? And to do that will they have to make UK savings look attractive to foreigners with higher rates which somehow (I can't see how exactly) filter through to high street rate?

Are we looking at UK variable mortgage rates of 6-7% then?

Its just that the chart of the 3 month LIBOR looks corrective me i.e. the downswing over the last 12 months is correcting the last impulse up move, thus implies that the main trend in interest rates is up and set to resume sooner rather than later... and the LIBOR rate tends to lead the BOE moves.

The likely trend will be to break above the previous high of 5% or so, how high ? don't know yet, too distant. But above 5% is a good initial target.

tellyerworraldowivyer

No, I don't think rates will rise, unfotunately, Deemy, the "unfair charges" argument is gathering pace, as most will know it has had TV airtime, I imagine banks will be looking at protecting their profits in any way possible, and that may even mean monthly fees brought in for standard current accounts!
This savings swindle is yet another profit protection scheme. :mad:

free4440273

rates will rise. by next year, between 6-7.5 per cent in the uk. in five years time between 7-8 per cent in the uk. federal reserve will increase rates till they are 6-6.5 per cent by the end of 2006.

MiserlyMartin

Japan are raising their rates massively. This will mean an end to cheap money borrowed by Gordon Brown and around the world. Puts pressure on our rates I'd say.

As regards the "unfair charges" banks threatening charging for current accounts this is just PR spin from the banks. They wouldn't dare replace the charges with those. Any bank that did would lose customers to nationwide and other players. They would more likely increase overdraft rates. And possibly decrease savings rates