BoE Interest Rate will go up in Ist quarter of 2011 ??

RenovationMan

southantrim3 wrote: »

I reckon interest rates will rise sooner rather than later and way they do, dear help anyone with a largeish mortgage. I think they could go up to 4% over the next couple of years (in my opinion of course.)

4%!!! :eek: :eek: OMG!!

Do the BoE IR calculators go to sucha high number. Unprecedented!

Really2

Dirk_Rambo wrote: »

gr8 ideeer for a deb8 m8. i like youre style. i voted yes

Mmm seem to have missed that option.

Pimperne1

If the BoE rate went up by 10 times its current rate it would still be quite low compared to the last ten years. Banks and Building Societies will just have to reduce the difference between BoE and SVR and we will all be happy.

adr0ck

interest rates won't rise for years

guaranteed

satchmeister

What connection does the BoE rate have with inflation? If the BoE were acting as they should ie controlling inflation they would have put rate up months ago. Inflation has been above the target for months and months .... all due to temporary reasons. The BoE have no interest in controlling inflation it is all about the banks. Vat goes up by 2.5% in January, Ok does not affect everything directly, there is also fuel duty increase and so inflation will be even higher in January but the BoE rate will remain at 0.5% for the next year.

PhylPho

satchmeister wrote: »

>
>
The BoE have no interest in controlling inflation it is all about the banks. Vat goes up by 2.5% in January, Ok does not affect everything directly, there is also fuel duty increase and so inflation will be even higher in January but the BoE rate will remain at 0.5% for the next year.

I'd hate to plan my own financial year on the basis of that forecast.

Andrew Sentence has started the ball rolling by deliberately talking about the BoE's "credibility".

You may yet be amazed at the way MPC members worry about how they're viewed in the wider world . . .

Really2

PhylPho wrote: »

I'd hate to plan my own financial year on the basis of that forecast.

Andrew Sentence has started the ball rolling by deliberately talking about the BoE's "credibility".

You may yet be amazed at the way MPC members worry about how they're viewed in the wider world . . .

Although I partly agree it was funny at around 5pm on radio 5 yesterday. A guy (think it was a prof at some uni) was basically saying Sentence is a moron (not quiet so blunt) as the tax increases will pinch pockets further.
Unless wages start creeping up he said there is no reason to raise.
Without wage increases inflation can only be temporary.
I think Sentence is risking his credibility, peoples pockets are being pinched by inflation as their is little wage inflation, increasing rates will only increase the pinching pockets further.

As the guy said rates are raised to cool down a overheating economy, there is little sign ours is or will be doing that any time soon.

Thrugelmir

Pimperne1 wrote: »

Banks and Building Societies will just have to reduce the difference between BoE and SVR and we will all be happy.

If you've been following mortgage markets you would have noticed that the difference between BOE and SVR is widening. Probably more so than the past 30 years.

As in the times of many lenders, competitive lending was based around 2% above base in setting SVR.

Only existing borrowers and a select few are obtaining (have this) finance at this level now. New borrowers are exposed to the whim of the market.

Pimperne1

Thrugelmir wrote: »

If you've been following mortgage markets you would have noticed that the difference between BOE and SVR is widening. Probably more so than the past 30 years.

As in the times of many lenders, competitive lending was based around 2% above base in setting SVR.

Only existing borrowers and a select few are obtaining (have this) finance at this level now. New borrowers are exposed to the whim of the market.

That's why I said "the banks and building societies will have to reduce the difference between BoE and SVR".

Thrugelmir

Pimperne1 wrote: »

That's why I said "the banks and building societies will have to reduce the difference between BoE and SVR".

Easy point to answer. Banks and building societies have no need to "compete" for business so margins will be maintained. As overall net lending is still contracting.

The FSA levy to fund the Icelandic savers is costing around a .25% on mortgage lending. The wholesale borrowing banking levy will also be a cost passed onto borrowers.

Lenders that offered rates sub 1% above base not so long ago were losing money. So new borrowers will be subsiding the lucky few for a few years to come.