MSE news: Base rate held at 0.5%

1984ReturnsForReal_2

Snooze wrote: »

Yes, another 10 months.

R

After the election...

chucky

Snooze wrote: »

Yes, another 10 months.

R

1984ReturnsForReal wrote: »

After the election...

how can you tell?

the Bank of England isn't a political party and won't be taking part in the General Election

Snooze

chucky wrote: »

how can you tell?

the Bank of England isn't a political party and won't be taking part in the General Election

True, but to say that the BoE and the government aren't in cahoots with each other would be naive at best. I am sure you are well aware of this too, but are just trying to start an argument simply because there are no facts available to prove it one way or the another.

If the IRs don't go up within 3 months after the election then I will eat my metaphorical hat. That is assuming that Labour don't put them up in between times of course.

R

chucky

Snooze wrote: »

True, but to say that the BoE and the government aren't in cahoots with each other would be naive at best. I am sure you are well aware of this too, but are just trying to start an argument simply because there are no facts available to prove it one way or the another.

If the IRs don't go up within 3 months after the election then I will eat my metaphorical hat. That is assuming that Labour don't put them up in between times of course.

R

robert - how could saying that the BOE not being a political party cause an argument?? you know you're not that sensitive

interest rates will go up when inflation becomes and issue due to the increased money supply if that does happen. if inflation doesn't come along, rates will creep back up to the 5% and 6% levels they were last year. when we do not know.

rates can't go from 0.5% to 5% in 10 months; it will take longer i would think. otherwise that would freak the markets and cause havoc with the stability of the pound. do you agree?

bluey890

PasturesNew wrote: »

Not for us all ... I was living on my interest 2 years ago. Now I'm uber-poor and not.

Never mind Cinders. We will find you your prince charming.
n.b. not to worry, it is not FungusFighter!

Snooze

chucky wrote: »

robert - how could saying that the BOE not being a political party cause an argument?? you know you're not that sensitive

interest rates will go up when inflation becomes and issue due to the increased money supply if that does happen. if inflation doesn't come along, rates will creep back up to the 5% and 6% levels they were last year. when we do not know.

rates can't go from 0.5% to 5% in 10 months; it will take longer i would think. otherwise that would freak the markets and cause havoc with the stability of the pound. do you agree?

Re your last bit, hmm I'm not convinced. I think if you recall, the vast majority of us on here 12 months back were saying that IRs at 0.5% would never happen, not to mention that QE would never happen either, and look where we are now - £175,000,000,000.00 of worthless paper floating about and mortgage payments at £2.50 per month.

A 4.5% rise over 10 months doesn't seem out of the realms of possibilities to me. Do I think it will happen? Honest answer - I ain't got a fackin clue! :rotfl:

R

thescouselander

bungle4x4 wrote: »

crap, let it rise! 10 percent please

No, lets reduce it more to 0%!

Adebisi

thescouselander wrote: »

No, lets reduce it more to 0%!

That would be great or even -1%

tomterm8

1984ReturnsForReal wrote: »

After the election...

Forecasting the future is a mugs game. So I will give it a try. I think interest rates will be static until substantially after the next election... at least two years... because we have a huge deficit to repay. In order to do that, a huge fiscal contraction seems inevitable, and if we have a huge fiscal contraction then we are unlikely to need a monetary contraction for some time to come.

We still have to see what happens when all the stimulus ends. Just ending QE will imply quite a substantial monetary contraction.

Now, the chances of a double dip recession seems rather high to me.

Thrugelmir

chucky wrote: »

robert - how could saying that the BOE not being a political party cause an argument?? you know you're not that sensitive

interest rates will go up when inflation becomes and issue due to the increased money supply if that does happen. if inflation doesn't come along, rates will creep back up to the 5% and 6% levels they were last year. when we do not know.

rates can't go from 0.5% to 5% in 10 months; it will take longer i would think. otherwise that would freak the markets and cause havoc with the stability of the pound. do you agree?

There have been occassions when rates have risen 1% a month quickly. I remember it clearly as it was the first year I had a mortgage, my mortgage rate from 10% to 14% :eek: , in 4 consecutive months. Even on a £25k loan it was a lot of money.

So when it happens it could be very quick.

The BOE will also step in if asset prices appear to be bubbling as well. I doubt if they will make the same mistake as recently.