No base rate rises for at least a year.. maybe 2 or 3 years

Harry_Powell

Thrugelmir wrote: »

Investors will demand a higher rate to reflect risk perception, and retail lenders compete for depositors money. While BOE base may not change.

Can someone else answer my question, in English?

chucky

Thrugelmir wrote: »

If there is legal action against the Skipton BS as has been mooted. The judgement could have a profound effect on the low lifetime BOE base trackers with other lenders.

they can moot all they like - every month i save £1k in interest repayments that goes straight to repay the capital outstanding on my rental property.

chucknorris

What legal action is being mooted against the Skipton BS? and why?

Thrugelmir

chucknorris wrote: »

What legal action is being mooted against the Skipton BS? and why?

They broke their guarantee.

Skipton Building Society may face a legal challenge over its plans to hike its standard variable rate mortgage for 64,000 borrowers.

The UK's fourth biggest building society announced last month that it was increasing its standard variable rate (SVR), the rate customers revert to when their existing mortgage comes to an end, from 3.5% to 4.95% from the beginning of March.

The move breaks the group's pledge that its SVR will never be more than 3% above the Bank of England base rate, although it said it reserved the right to remove this ceiling in "exceptional circumstances".

But London-based law firm Leon Kaye Solicitors is investigating the legality of the move under the Unfair Contract Terms Act 1977.

It is also looking at whether the downturn in the economy is enough to trigger the "exceptional circumstances" clause.

The group said: "These 'exceptional circumstances' clauses are normally submitted into contracts to ensure that the lender has an element of control if things turn bad. However, such clauses can fall foul of the
Unfair Contract Terms Act 1977.

It has already been contacted by around 100 Skipton mortgage customers, and is considering launching a test case or class action in the county court.

It may also take the issue to the Financial Ombudsman Service and trading standards.

Leon Kaye has previously represented policyholders of Equitable Life and is currently representing shareholders of both Bradford & Bingley and Royal Bank of Scotland.

But Skipton said it had consulted with regulator the Financial Services Authority before it announced the move.

A Skipton spokeswoman said: "As a responsible business, we are in constant dialogue with our regulator.

"We are not aware of any formal challenge being made but if one was to arise, we would deal with it through our normal procedures."

Skipton has around 29,000 customers on its SVR, with a further 35,000 due to revert to it in the near future.

The rate hike will cost a homeowner with a typical £150,000 mortgage £124 a month, or nearly £1,500 over the course of a year, and comes despite the fact that interest rates have been kept on hold since last April.

Six other lenders have increased their SVR since interest rates have been kept on hold, though none has hiked them by the same magnitude as Skipton. Accord Mortgages made the next biggest rise, of 0.65%.

Thrugelmir

Harry_Powell wrote: »

Can someone else answer my question, in English?

Supply and demand for deposits.

Harry_Powell

Why is it a requirement that interest rates go up? (I mean a requirement from a UK economic standpoint, not from the standpoint of helping out savers or HPCers).

Anyone?

JayScottGreenspan

For a bit of balance:

Thrugelmir

Harry_Powell wrote: »

Why is it a requirement that interest rates go up? (I mean a requirement from a UK economic standpoint, not from the standpoint of helping out savers or HPCers).

Anyone?

Log onto the BOE website and read the monthly committee meeting minutes. There are very interesting and help one understand all the factors that direct the decision regarding rates.

Harry_Powell

Thrugelmir wrote: »

Log onto the BOE website and read the monthly committee meeting minutes. There are very interesting and help one understand all the factors that direct the decision regarding rates.

I already know, I'm waiting for the person who stated that it's a requirement for IR rises to explain why. I've heard it so often from 'bear' gang members that rates should/will rise dramatically, yet they never say why this is the case. I wanted to enter into a discussion. No response though .

JayScottGreenspan

Harry_Powell wrote: »

I already know, I'm waiting for the person who stated that it's a requirement for IR rises to explain why. I've heard it so often from 'bear' gang members that rates should/will rise dramatically, yet they never say why this is the case. I wanted to enter into a discussion. No response though .

The likliest two reasons, IMO:
* Other central banks put their rates up a bit. We'd have to do likewise or face the pound weakening further, which would import inflation.
* If the inflation outlook is not nice.

I don't think we'll have to worry about using IRs to hold rampant economic growth to a sustainable pace.:rotfl: