What BOE interest rates will really cause financial disaster?

Really2

sss555s wrote: »

The Torys usually have pretty high rates so i'll go for 6-8% by 2012.

What will he BOE decide though.
I Will bet you £50 base rate wont be there by 2012 that would be a 5.5-7.5% increase in 18 months.

Given they only usually increase by .25%, 6% would take 22 months to hit if they raise every month from now.
8% would take 30 months of continues rises.

It would be one hell of a recovery to sustain that.

sss555s

Inflation is here and has a firm grip now.

I think the government wants inflation so maybe i was a bit high.

What is the link between inflation and interest rates except for them both fighting for your money? (blonde moment )

ILW

I had just taken my first mortgage in 1990 and rates webt up to 14%, it was a struggle but not theend of the world for most.

Really2

sss555s wrote: »

Inflation is here and has a firm grip now.

I think the government wants inflation so maybe i was a bit high.

What is the link between inflation and interest rates except for them both fighting for your money? (blonde moment )

Inflation has fallen the last two months, we will have inflation next year but that is caused by tax so does not need to curbed as it will fall naturally the following year.

What is inflating through monetary policy?

Inflation will be tackled with IR if it is believed it will help bring down inflation (stregnth £) but perhaps more importantly if it will not be of adverse effect to the economy)

(so higher IR should mean lower inflation, providing the inflation is caused by the stregnth/weakness of the £)

sss555s

ILW wrote: »

I had just taken my first mortgage in 1990 and rates webt up to 14%, it was a struggle but not theend of the world for most.

Same here

These "lily asses" don't know they're born :rotfl:

nicko33

Thrugelmir wrote: »

With interest rates at all time lows. There's never been a better time to repay debt.

Does that work in reverse?
When interest rates are high, is that the worst time to repay debt?

sss555s

Really2 wrote: »

Inflation has fallen the last two months, we will have inflation next year but that is caused by tax so does not need to curbed as it will fall naturally the following year.

What is inflating through monetary policy?

Inflation will be tackled with IR if it is believed it will help bring down inflation (stregnth £) but perhaps more importantly if it will not be of adverse effect to the economy)

(so higher IR should mean lower inflation, providing the inflation is caused by the stregnth/weakness of the £)

I just find "on the street" that things are more expensive.

Tescos are getting away with themselves :A

Really2

sss555s wrote: »

I just fine "on the street" that things are more expensive.

Tescos are getting away with themselves :A

Things are maybe, but I that is less likely to damage the economy than rate increases. (so BOE are getting us to swallow the inflation instead of making it easier)

I get the feeling we will have to put up with 3-4% inflation until the end of 2011.

Graham_Devon

It's very difficult to answer the poll.

However, what I will say, is the longer we have low interest rates, the more people will get used to it. I dare say many have now got used to their smaller mortgage payments, and an increase will be a shock. Add to that other increases we are seeing in tax and general living expenditure...and the shock could be pretty great.

I have a feeling fixes will simply be pulled left right and centre as soon as indications of rates start to rear their heads, so don't think many people currently on SVR will be able to just switch to a fix to combat rises in any hurry.

Therefore, the actual percentage figure for actual problems to arise, will get lower and lower the longer interest rates stay low.

Graham_Devon

Really2 wrote: »

What will he BOE decide though.
I Will bet you £50 base rate wont be there by 2012 that would be a 5.5-7.5% increase in 18 months.

Given they only usually increase by .25%, 6% would take 22 months to hit if they raise every month from now.
8% would take 30 months of continues rises.

It would be one hell of a recovery to sustain that.

1988 Interest rates 8%
1990 Interest rates 15%.

Never say never.