Anyone else worried about the interest rate rise?

ZTD

lush_walrus wrote:

Exactly, but people do not lend, banks do and as we are not a communist country and live where the markets are free to dictate the changes to the economy, changes to the economy are the only way to control spending.

No. The banks continue to operate as special "dispensation" to the normal rules of solvency. That's if you go to Yahoo finance and look up information on Lloyds TSB or whoever, data involving debt such as gearing is not shown for banks etc. This is because every bank is by the nature of its business - bankrupt.

The other side of this coin is that banks are very highly regulated. Reserve requirements are set by the State and can be changed by the State. If I wanted to drain liquidity out of the economy without changing interest rates, then I could knock up the reserve requirements to (say) 20%. This changing of reserve requirements has been done before - and will be done again. It's nothing special.

The other things I alluded to are Money Market Operations/Repo's and such like. These too, are interventions by the BoE and have nothing to do with markets dictating anything.

earwig

climbgirl wrote:

Well yeah, but nobody "makes" you feel poor - you only feel poor yourself if you buy into the whole advertising/consumerist cycle. It's pretty simple to opt out and just say no, I don't need that bag/holiday/car whatever.

Anyway, getting off topic!

i understand what you are saying but my couson got beaten up at school quite badley bcause she didnt have a nike schoolbag so wheather or not you buy in to it or not you are made to feel poor ask her she was made to feel like a refuge because her school bag was from poundstrechers and not a trendy sports shop if kids are behaving like that by the way she only ten what hope is there

ZTD

Bogof_Babe wrote:

I think the only long-term solution is to get the message across to the population that blind consumerism is old news, while consolidation of our individual finances is the future.

If your finances were going to be "consolidated", why would you work hard and take risks without being rewarded for them?

The Communists tried that. It doesn't work.

cupid_s

I am quite glad really. When we took out our mortgage in 2004, we did so knowing that even if the mortgage interest rate went up to 15% we could still comfortably afford our repayments.

Ok I'll be paying a bit more in mortgage when it becomes unfixed next year. But I cannot see how, if interest rates rise, house prices wont fall. This will be great for me as it will make a bigger house more affordable

lynzpower

does it also follow that with interest rates going up that over time there will be less 0% cards to tart to?

Bogof_Babe

ZTD wrote:

If your finances were going to be "consolidated", why would you work hard and take risks without being rewarded for them?

The Communists tried that. It doesn't work.

Maybe consolidated isn't quite the right word, but I know what I meant and it has worked for us. We have used every penny of overtime, which we worked at every available opportunity, plus a small (£16K) legacy from an aunt, to save to pay off our mortgage. At the same time we had standing orders from our wages into savings accounts, so as soon as we were able to, we paid the mortgage off. It left us zilch in savings but we just started over again.

We only had mediocre wage-slave office jobs (I finished on £15K four years ago, OH on £18K last November), but by frugal living we managed to ditch the rat race before it wrecked our health. We have not had a holiday since 1989, virtually everything in the cupboard and freezer has a reduced sticker on it, my spreadsheet for clothing 2006 now totals £93.65 (I'm surprised, didn't think I'd spent that much), and we last ate out in June. I drive an F reg Metro, have no TV except the basic five channels.

What I mean is, no-one seems to have a vision anymore, of where they want to be and how to get there. I appreciate that we were lucky to be in the housing market when we were, before prices became ludicrous, but if I were young again I would buy a tiny studio apartment to get on the ladder, work my socks off to increase my equity in it, then continue working and saving for as long as it took to reach where I aspired to be.

We probably managed a bit easier because sadly we were unable to have children, and I do appreciate that this makes life a whole lot more expensive. I am humbled to read some of the struggles that people on this site have to cope with, but it will all work out in the end, so long as you don't have too many unrealistic expectations.

Big_O

The biggest rise I could find was 15/11/1979 when the rate went from 14% to 17%. Ouch!

krissymurt

hello is there any one on

krissymurt

is there anyone on

krissymurt

hello is anyone talking