Base rate could be at 0.5% untill the end of 2011

ILW

It's interesting that major banks are now offering savings rates of around 5% on 2 year fixes. It seems the market is coming into play despite what the BoE would like.

Really2

It is not because of what the BOE want.

But if inflation is below target they can not really increase the Base rate.

jowiththeshow

IMHO it does matter what the base rate is, it is what the lending rate it.
Dropping the base rate has meant that banks have dropped their savers rate but not their lending rate. If anything the lending rate has gone up for most people as the requirements for lending have toughened

ILW

jowiththeshow wrote: »

IMHO it does matter what the base rate is, it is what the lending rate it.
Dropping the base rate has meant that banks have dropped their savers rate but not their lending rate. If anything the lending rate has gone up for most people as the requirements for lending have toughened

This post seems to contradict itself somewhat. Base rate seems to be largely irrelevent to both savings and lending rates.

BlondeHeadOn

It's bad news for savers though, surely? Or are things changing sufficiently so that those people relying on the interest from their savings are finding it a bit easier?

Not having any significant capital myself (unfortunately) I don't know if this is still a major downside...

Really2

BlondeHeadOn wrote: »

It's bad news for savers though, surely? Or are things changing sufficiently so that those people relying on the interest from their savings are finding it a bit easier?

Not having any significant capital myself (unfortunately) I don't know if this is still a major downside...

I think most savers can now get a decent return considering what base rate is and inflation.

In fact considering inflation most saver have never had it so good now. (EG 5% fixed rates)

JayScottGreenspan

"Base rate could be at 0.5% untill the end of 2011."

Could. The media love that word.

Graham_Devon

Really2 wrote: »

I think most savers can now get a decent return considering what base rate is and inflation.

In fact considering inflation most saver have never had it so good now. (EG 5% fixed rates)

5% fixed rates are normally for 3 year bonds.

The normal saver will get max of around 3.25% at the mo.

ajmoney

Lotus-eater wrote: »

I was going to say the same thing, not many people on over a two year tracker.

I am, Nationwide's lifetime tracker. The only problem is they have a collar so I am at 2.68%. I have a friend with a house worth £200,000 more than mine on a tracker and his monthly payments are less because his doesn't have a collar!

mewbie_2

Does cheap rates imply bubbles building in commodities, equities, etc? No point in keeping money in a savings account.