Ok - interest rates to rise - but WHEN??

nollag2006

hearts wrote: »

Why do people think the tories will raise interest rates soon after they are elected? I would have thought it was the last thing they'd want to do. They must surely try to keep rates low for as long as possible to allow time for a sustained recovery.

Both Labour and the CONservatives support the concept of an independent BOE. Merv has indicated that mid-term interest rates are not set to move. A change of government should not affect this.

the_ash_and_the_oak

nollag2006 wrote: »

As a moderate bull, I think that we will see no rises above 0.5% for the next two years, with the possibility of rates falling to 0.25% if the recent strength in the housing market starts to wane (but there is no sign of that yet, thank goodness)

Isn't the strength of a market measured in levels of activity?

nollag2006

the_ash_and_the_oak wrote: »

Isn't the strength of a market measured in levels of activity?

Ummm… nope.

Economics 101 – the only measure that matters in any market is price. If prices rise, it will attract more supply and activity, which is exactly what we have seen over the past few months. Activity levels are rising, as are prices which is great news

mewbie_2

michaels wrote: »

SO do we see a 0.25% cut in feb/march with strong pressure on the banks to reduce their rates by a lot more to reflect the falls in libor?!

To be reversed of course after the election

Either that or tanks round Heathrow.

LeeSouthEast

My view? The interest rate will remain largely unchanged for two years. The rate of inflation however will go to 10-15% to offset our huge national debt. When that is under control, interest rates will rise sharply to bring inflation back down again.

Whammy. Double.

Thrugelmir

Rates will have risen slightly by next year at the latest May/June, and will finish the year around 1.5% give or take a quarter point.

However if the BOE gets QE wrong, no one actually can forecast the impact, and inflation rears its head. Then we may be in for a sudden sharp rise in rates.

If you are refering to mortgage rates, then expect fixed rates to harden and edge upwards throughout 2010 irrespective of BOE base movements.

Cannon_Fodder

"the only measure that matters in any market is price"


[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=2&a=E&W-ALL&s=01 January 2006&e=01 August 2009&t=1[/IMG]


Don't think that fits;

Late 2006 to Mid 2007 = a drop in transactions recovered without any easing of prices.
Late 2007 = prices fell following a huge drop in transactions.
Early 2009 = volumes began to pick up, prices following behind...

kriss_boy

I reckon it will remain at 0.5% for the remainder of the year but then will steadily rise to arounf 2/3% but end of 2010.

purch

Ok - interest rates to rise - but WHEN??

I'm going for a Thursday :cool:

HAMISH_MCTAVISH

2010 will not see rates cross 1%.

Rates are unlikely to cross 3% until 2015, and 5% until 2020 (middle of next boom)