Interest rates 'may hit 47pc' in two years

Cleaver

Wayne Gooch, chief economist at the influential Money For Nothing, Chicks For Free think tank, has warned of an interest rate environment not seen since the 1650s

He said the rise could happen as the recovery beds in and Government measures to stave off a recession lead to an explosion in the money supply.

Mr Gooch also warned of a return to "pure chaos" as rates hit 47% within the next 24 months.

"Given that people are just making figures up and plucking stuff out of the air, I thought I'd have a stab and come up with something crazy. I was going to say that rates would hit 50%, but the wife said that round numbers look a bit suspicious, so I've just knocked a few points off." Mr Gooch said.

www.interestratenews.com/mentaliststuffinnit.htm/

This is worrying news. A mortgage of £150,000 is currently £625 per month in interest repayments when calculated at 5%. If rates do go to 47% then people will see the interest part of their mortgage rocket to around £5,875 per month. Is this affordable?

If people are paying £5,875 a month on their mortgage how will they afford the essentials? You can easily see people having to forgo their usual bottle of Pinot Grigio and instead have to plump for one of those cheap boxes of wine that never taste quite as good. There will be riots on the streets.

Luckily when we got our mortgage we had a deposit of 97%, borrowed 0.003 our salary and made sure that if one of us lost a leg, the other lost their job and rates happened to go 70% we could still easily afford our mortgage. That seems the sensible MSE Debate House Prices forum methodology, so we'll be okay. Everyone else is gonna be f**ked though.

LydiaJ

:rotfl:
This forum is a better place since you returned from your recent absence, Cleaver. Your ability to entertain while making a serious point consistently impresses me.

Cleaver

Thanks Lydia.

Just thinking though, these higher interest rates will be a blessing for hard working families and savers who deserve a decent return on their deposits.

Every cloud and all that.

Really2

Cleaver wrote: »

Thanks Lydia.

Just thinking though, these higher interest rates will be a blessing for hard working families and savers who deserve a decent return on their deposits.

Every cloud and all that.

Don't forget the [STRIKE]people who want to get a cheaper house via defaults[/STRIKE] poor pensioners.:)

Spirit_2

Cleaver - I don't know how to thank you. I work in the public sector and need to ensure I get a wage demand in, in good time.

Got to protect the differentials over the private sector... and the pension.

Barnetbear

Cleaver wrote: »

Thanks Lydia.

Just thinking though, these higher interest rates will be a blessing for hard working families and savers who deserve a decent return on their deposits.

Every cloud and all that.

Well, was it JuliaQ (I could be wrong) who said on another thread that if the housing market fails (and IR rates up would do that for sure) then savers returns would fall or be nil as banks would not be able to invest.

I didn't really totally grasp exactly why as that didn't happen last time. But of course it's all different this time...

Cleaver

Spirit wrote: »

Cleaver - I don't know how to thank you. I work in the public sector and need to ensure I get a wage demand in, in good time.

I'm afraid the same report came to the conclusion that there won't actually be a public sector in two years time. All public sector workers will be burned to help keep pensioners warm and their former jobs will be done, where necessary, by a futuristic robot called Cambot3000.

Really2

Barnetbear wrote: »

But of course it's all different this time...

It is, apparently now anything that has never happened in the world is now possible because the base rate went down to 0.5%.

Nasa are using it as proof of light speed travel now being possible with a litre of diesel.

Try it yourself say something is not possible because it has never happened and the proof is BOE base rate being 0.5%

Apparently Jedward are where they are because of a 0.5% BOE base rate.

vivatifosi

Are you outing yourself as the Daily Mash's economic correspondent?

Very funny

Gorgeous_George

I think 47% is ridiculous. How am I supposed to spend it all?

Seriously, I think 16% may be reasonable next year. 0.5% in January, February, March and April followed by 1.5% in May, June, July and August 2.0% in September, October, November and December. Total = 16%.

GG

Barnetbear

Really2 wrote: »

It is, apparently now anything that has never happened in the world is now possible because the base rate went down to 0.5%.

Nasa are using it as proof of light speed travel now being possible with a litre of diesel.

Try it yourself say something is not possible because it has never happened and the proof is BOE base rate being 0.5%

Apparently Jedward are where they are because of a 0.5% BOE base rate.

Ah-ha, now I'm getting it!

But of course what no one has pointed out is the obvious - and that is that even if the BoE or MPC tried to increase base rates beyond the 1% or whatever that Roger Bootie suggested was to be the ceiling for n-years, extra-terrestrials would never put up with it, and frankly they have quite a lot of influence in The City once they start aiming their Vapo-laser-deathray in the general direction of Bank tube station. Mr King would not chance it, not unless he wants his lunchtime egg & cress sandwich toasted, along with the rest of him.