5% Interest Rate

david_hellier

It might be easier to see it as a rise of 5% in rates. So whatever you pay in interest now will go up by 5% (5.26% actually). So if you pay £1000 per month interest, you'll pay another £50 per month after the rise.

I would expect rates to be about 15% in 5 years' time driven primarily by higher fuel inflation. A similar pattern to the late 70s, with the added problem of v high personal debt. Not pretty.

earwig

i think somthing big is going to happen because houseprices are to high reposesion is on the rise unepolyment is on the rise bankrupcty is going to top a hundred thousand this year and thats not happened before more and more people are gettin iva or dmp as they cant aford to live now and thats before you see anymore intress rate rises people are only just holding on and it wont take that much for it all to go to the wall

earwig

i think somthing big is going to happen because houseprices are to high reposesion is on the rise unepolyment is on the rise bankrupcty is going to top a hundred thousand this year and thats not happened before more and more people are gettin iva or dmp as they cant aford to live now and thats before you see anymore intress rate rises people are only just holding on and it wont take that much for it all to go to the wall

roswell

James, I htink your right something big will happen in the cycle as always does but its the unknowing of what the catalist will be thats the worst, it may be that interest rates are up a little bit but in the argumant that you need high inflation for a bust that just isnt correcrt.

No one complained 5 years ago that mortgages got cheaper each month the problem is spending habbits and peoples willingness to take on debt due to low repayments (historicaly) means that the svaing on the mortgage cost each month lead to more spending or more scope for bigger mortgages (thus allowing banks to offer higher multiples) all in all.

No one can say what will happen or when but with all essential bills riaseing and wages not raising something somewhere is going to give.

ZTD

There is going to be a "disaster" somewhere along the line. That's my opinion. I feel that all this wondering about catalysts is just trying to draw comfort by identifying cause and effect in close proximity to one another. A sort of "If we'd stopped X from happening, then we'd be OK."

We're stuffed in terms of the economy. Right now. It just hasn't caught up with us. I liken it to a pressure cooker bubbling away on the stove with the pressure release valve blocked. It's going to blow. You could do a postmortem and say it blew because of a tiny crack in the lid. So what? If that tiny crack hadn't been there it would have still blown. Just somewhere else.

Same with the economy. We're too far gone. The only things left to find out is how big and how bad and the big question: When?