Interest rate will go up in new year

adr0ck

basically more evidence that interest rates wont be going up for a long long time

this thread title should be

interest rates going up in new year 2015 at earliest

Bangkok-Dave

I totally agree.
There is no way interest rates will rise for a very long time. I think it's time to really fill your boots for home owners and landlords. Either overpay your mortgage or have a good time for the next 5 years or so.

mbga9pgf

Interest rate will go up in new year

In good old crimbo panto stylee....

OH NO THEY WONT!

http://www.independent.co.uk/news/uk/home-news/economic-growth-weaker-than-previously-thought-2166767.html

The most recent quarter - between July and September - experienced growth of 0.7%, down from 0.8%, while the first and second quarters saw growth of 0.3% and 1.1% respectively, down from 0.4% and 1.2%.
Any hope that consumers will spend their way to economic recovery were dashed by new figures revealing a quarter-on-quarter increase in saving in the third quarter.

Until wage rises start to feed through and spending increases, not much chance of a rate rise. My guess is 1% by mid 2012, 2-3% by 2014 going off swap rates.

People need to realize there is a LOT of politics in what the CBI have stated... not least, they need to restrain exuberant individuals into maxing themselves on the clink over the next 18 months... by pushing out nasty rumors, I bet savings rates are about to drop and mortgage repayments go up significantly over the next 6 months.

Batchy

While we own shares in banks as a country through the government, rates will remain low, so they can recapitalised, write off all the losses and provisions they need for the future, regain profitability (like barclays) and increase the selling prices of their shares.

When this is done the government will sell off at a huge profit... then they will start increasing rates.

I mean with FTB exemption on stamp duty until 2012 they will hardly start putting up the prices by raising rates too, will they... its a bit of 6 of one half a dozen of another, whats the point.

The last thing the government needs is a house price crash, that punishes their main voters, that punishes the banks that they OWN, and that punishes investment in new business at a time the economy is struggling with small business's

No way sir! its just not going to happen.

They dont want people to save... (effect of raising rates, encourages people to get more interest on savings)
They want and need people to spend there way out of this recessionary risk! (double dip)

I see it playing out, rates rise in 2013-14 then in 2015 they come back down, as a vote winner.

Conservatives are doing everything they can to destroy the reputation of lib dems so all their voters all convert to conservatives so they end up with a majority.

PS students dont vote... and parents will be relieved they dont have to fund their budding students, but they will be funding themselves with some debt... and investing in themselves.

mbga9pgf

I see it playing out, rates rise in 2013-14 then in 2015 they come back down, as a vote winner.

Yep, along with the deflationary effects of a reduction in VAT rate in April 2014 back to 17.5%... half the reason the cuts are front loaded is so we get to enjoy the "recovery" in the run up to the election.

Look at swap rates. Marginally higher than last year, but over the past month, have actually REDUCED rather than increase.

chucky

mbga9pgf wrote: »

Look at swap rates. Marginally higher than last year, but over the past month, have actually REDUCED rather than increase.

errrr no - they're lower than they were last year

Batchy

not so sure about the VAT cut... all depends on economic performace and deficit status, and compared to budget!

But there is potential!

mbga9pgf

chucky wrote: »

errrr no - they're lower than they were last year

Err, no, they are more expensive than a year ago actually...

http://www.swap-rates.com/UKSwap_extended.html

gagahouse

mbga9pgf wrote: »

Err, no, they are more expensive than a year ago actually...

http://www.swap-rates.com/UKSwap_extended.html

you don't seem to be comparing the same rate

mbga's link shows 7yrs at 2.73 1 year ago, chucky's chart shows 7yrs at 3.45 a year ago (dec 09)

chucky's chart is right, bloomberg shows the same rate for 7yrs a year ago and the rate at middle of nov 10



Uploaded with ImageShack.us

also swaps usually trade as a spread over the equivalent tenor gilt, sometimes these can go negative i.e 10yr swap 4.50 while gilt is 4.70, this indicates that in interbank market the credit risk of a bank is considered better than that of the sovereign issuer - IIRC this happened before the election and reversed when the coalition won

chucky

gagahouse wrote: »

you don't seem to be comparing the same rate

mbga's link shows 7yrs at 2.73 1 year ago, chucky's chart shows 7yrs at 3.45 a year ago (dec 09)

chucky's chart is right, bloomberg shows the same rate for 7yrs a year ago and the rate at middle of nov 10



Uploaded with ImageShack.us

they've not moved too much in the past year anyway - the differences are not great. 1% is the largest spread i believe.