Future interest rates: what the "experts" are saying

chucky

ILW wrote: »

Why do you say that?

if rates rise it will be because there is growth in the economy and rising rates stops the economy overheating or growing too quickly...

if rates rise because of inflation it will mean that prices are rising, if prices are rising - wages will/should increase too.

if rates rise without wages rising then the economy is screwed and there will be people losing their jobs.

Batchy

ILW wrote: »

Why do you say that?

At the moment we have unsecured loans of 10% based on 0.5% base rates...

HP agreements taking this into account also, and car leases.

this means personal loans business loans credit cards, every form of finance will increase more than 2 fold...

would you buy a new car in a couple of years time with apr of 19% +, would you take a loan out for a holiday for 20% obviously you will still have the 0% deals but they are just as expensive just packaged differently.

FACT the banks are re-capitalising themselves, and will continue to do this urgently so they dont get left behind on the margin front.

Until a single bank realises they have enought capital to satisfy all the current capital reserve requirements and a run on the bank can be dealt with, then they will continue to do it, with spreads as high as they are now. Until then, rates and spreads for banks will remain ridiculously high and there will be no competition in the market place for its finance products.

ILW

Batchy wrote: »

At the moment we have unsecured loans of 10% based on 0.5% base rates...

HP agreements taking this into account also, and car leases.

this means personal loans business loans credit cards, every form of finance will increase more than 2 fold...

would you buy a new car in a couple of years time with apr of 19% +, would you take a loan out for a holiday for 20% obviously you will still have the 0% deals but they are just as expensive just packaged differently.

FACT the banks are re-capitalising themselves, and will continue to do this urgently so they dont get left behind on the margin front.

Until a single bank realises they have enought capital to satisfy all the current capital reserve requirements and a run on the bank can be dealt with, then they will continue to do it, with spreads as high as they are now. Until then, rates and spreads for banks will remain ridiculously high and there will be no competition in the market place for its finance products.

Anybody who takes out a loan over a number of years to pay for a two week holiday is just plain daft, and if this type of borrowing had been discouraged in the past, I believe we would all be in a better position now.