Interest rates 'may hit 8pc' in two years

chucky

ILW wrote: »

There seems to be a number who think that "savers" should not expect a rate that keeps up with inflation because they are doing nothing to help the economy. I would suggest that as their savings are being invested in the economy then a real return is not an unreasonable expectation.

traditional saving by holding your money in an account is probably going to die off... saving and investing will need to move so that the saver gets better returns.

you can't rely on a bank account offering you 0.25%

treliac

Whatever happens, I'm just relieved that we've got another 4 years fixed on our mortgage and it will see us through critical stages with the children.

Maybe we could have gone cheaper in the short term but I'm relieved, personally, not to have to worry about what happens for the time being.

chucky

movilogo wrote: »

It won't - now go back to sleep

If it happens, nearly half of nation will ask for council house. No govt. can allow this to happen. Simples.

of course rates won't go to 8%.

if they go to 8% apart from what you say, the majority of people on this froum won't have a job either.

chucky

Graham_Devon wrote: »

I was told only the other day on here, there is absolutely 0 chance of this happening.

if you think that it will happen you should invest everything in Gold - that will be the answer for anyone who thinks rates will go that high.

Really2

Bleed wrote: »

Thought I'd chime in and deal with the facts.

If you can deal with 8%+ mortgage rates over the lifetime of your mortgage (or mortgages), you're cool as the Fonz.

If you can't then you'd better hope it doesn't come to pass otherwise you're fooked.

To be frank I would have thought that anyone taking out a mortgage would have factored this kind of rise in, especially over 25 years, that's a long time and we have seen in the last couple how quickly things can change.

Same goes if you bought jointly, you should factor in much higher rates than now and also on factored them in on a single wage. Why? Simple if 2 people avoid illness, accident, unemployment, divorce or death over a 25 year period they will have likely been lucky.

True,
but you would also have to factor in some kind of wage inflation also.

On the bold bit, I would say if you experience any of those you are unlucky TBH not the way you put it.
Divorce and death are not to bad in terms of housing (obvious they are hell for anyone going through them), divorce you sell, death you insure against when buying surly.?

Or you just take ASU insurance also.

julieq

Graham_Devon wrote: »

I think you will find it's plucked from here in the actual report:

I think our definitions on "thin air" may somewhat differ.

You are right though, it is absolutely scandalous that the reports have used what's in the report. Frankly outrageous.

Graham, there is no reasoning behind the 8%. It's a conjectural number. There is no methodology or chain of calculation. It's plucked from thin air.

I'm not altogether surprised that you don't understand the distinction, because you're not the brightest bear in the box. But this is a hand waving polemic being distributed as if it were the output of a detailed forecast model.

The report isn't a report in the generally accepted sense of the word. If that was true, Peston's mumblings would be reports too.

FATBALLZ

8% eh, looking forward to that. All the debt junkies will be bankrupted, house prices round my way will be in double figures, BTL chancers will be living in cardboard boxes. Nice one. :beer:

Graham_Devon

julieq wrote: »

Graham, there is no reasoning behind the 8%. It's a conjectural number. There is no methodology or chain of calculation. It's plucked from thin air.

I'm not altogether surprised that you don't understand the distinction, because you're not the brightest bear in the box. But this is a hand waving polemic being distributed as if it were the output of a detailed forecast model.

The report isn't a report in the generally accepted sense of the word. If that was true, Peston's mumblings would be reports too.

LOL.

If you say so Julie, if you say so. There really is no point me refuting your arguments as it will merely lead to more attempted put downs.

I will say one thing though. You obviously do not like this report. It doesn't suit your viewpoint, therefore will do anything possible to pass it off as anything but a possibility.

But by saying what you are saying above, you are also passing off all predictions or reports that you DO like. All are using figures based on their thoughts. It's the future. There is nothing more you can do.

He's backed it up with reasons. These reasons, whether I believe him or not are his reasons and are there to be refuted. So instead of simply refuting everything said with no reason, while putting others down, while using big words which mean nothing....refute his points. Refute his reasonsing.

But you won't. You will simply talk about "picked form thin air" when clearly its not. You will sit there typing little one liners while getting more and more frustrated at others who do not follow your line so find ways as passing them off as inferior to you. You will sit there banging on and on that I haven't answered your querstion about saving, when I have already told you that, due to the reasons above, there is no point me answering you as it won't suit your viewpoint and I'll get a one liner in return.

chucky

Graham_Devon wrote: »

He's backed it up with reasons. These reasons, whether I believe him or not are his reasons and are there to be refuted. So instead of simply refuting everything said with no reason, while putting others down, while using big words which mean nothing....refute his points. Refute his reasonsing.

it's a fantasy prediction - just like saying that Gordon Brown will win the next General Election he obviously won't.

if rates go to 8% it's because of inflation.

when there is inflation it usually means that wages increase and/or asset values go up too

according to many on here - these two are the only ones that will go down while everything else will increase with inflation.

the possibility of only those two falling or even left behind in an inflationary environment are less than zero.

Really2

chucky wrote: »

the possibility of only those two falling or even left behind in an inflationary environment are less than zero.

The counter argument is that just because it has never happend does not mean it can't. (even though this thread clearly indicates the report is thinking wage and asset inflation)

I presume the people saying that would have no problem agreeing base rate "could" stay at their current levels for eternity. You just never know.