Interest rates to hit 1.25% by year end

macaque_2

They have no choice from what I can see. It is a case of the devil and the deep blue sea.

Mervyn King, the Bank of England’s governor, has given his clearest signal yet that rates could hit 1.25 per cent by the year end, as he warned that inflation could cause serious problems for families over the next three years.

http://www.telegraph.co.uk/finance/economics/8326357/Interest-rates-to-rise-Mervyn-King-hints.html

1984ReturnsForReal_2

If he is being wild & reckless maybe 1.5%

HappyMJ

I wish they'd hurry up and do it. Whilst inflation (4%) exceeds what I earn on my savings (3%) then I am losing money each month.

ILW

If someone had said the same thing three years ago, they would have been laughed at.

Rochdale_Pioneers

rates won't go up as long as the economy is on its knees. Rates were slashed because of the crash, and with the economy at best stagflating away it would be madness to raise rates and stifle demand yet further.

As and when we actually see some sustainable growth, THEN raise rates. However, some onus will have to be put on banks to stop the current profiteering. If they simply pass on rate rised direct to borrowers there will be a lot of bankrupts out there. Halifax charged me less than 1% on top of base rate for a mortgage in 2006. The same offer today would be 6% on top.

AD9898_2

macaque wrote: »

They have no choice from what I can see. It is a case of the devil and the deep blue sea.



http://www.telegraph.co.uk/finance/economics/8326357/Interest-rates-to-rise-Mervyn-King-hints.html

If the likes of Hamish are to be believed, apparently this kind of rise will have no effect on the housing market...........

I beg to differ, as I wonder how much of that .75% rise (if it happens) will be added to many SVR mortgages ? I'd say all of it, and lets be clear many people vulnerable to defaulting will be the very people on these SVR's as many are unable to get new deals due to NE and lending restrictions.

There is absolutely no question that rises in rates, no matter how small will increase forced sellers, and it will be directly proportional to the size of any rate hike.

1984ReturnsForReal_2

Rochdale_Pioneers wrote: »

However, some onus will have to be put on banks to stop the current profiteering.

Profit = Tax


Do you think the Condems will be in any hurry to sort that one out?

Loughton_Monkey

More than happy to see 1.25% by year end. But only if that means I can get 3.65% on instant savings instead of the measly 2.9%. Might almost cover inflation then! For two years, net savers have paid a big 'price'. Time for net borrowers to share the pain methinks.

myhouse_2

Rochdale_Pioneers wrote: »

rates won't go up as long as the economy is on its knees. Rates were slashed because of the crash, and with the economy at best stagflating away it would be madness to raise rates and stifle demand yet further.

As and when we actually see some sustainable growth, THEN raise rates. However, some onus will have to be put on banks to stop the current profiteering. If they simply pass on rate rised direct to borrowers there will be a lot of bankrupts out there. Halifax charged me less than 1% on top of base rate for a mortgage in 2006. The same offer today would be 6% on top.

Wishful thinking. No doubt the bank would like to keep rates low much longer, but their hand is being forced by the high inflation - which left uncontrolled will also damage the economy.
The Bank has already dropped some big hints that rates will rise so I'm surprised you are still confident they will not.

1984ReturnsForReal_2

Loughton_Monkey wrote: »

Time for net borrowers to share the pain methinks.

:rotfl:


You mean SVR mortgage borrowers.

All other debt is expensive

Loughton_Monkey

1984ReturnsForReal wrote: »

:rotfl:


You mean SVR mortgage borrowers.

All other debt is expensive

I basically mean all borrowers except myself!

Personally, I'm on a BR+1% Offset. Could probably still 'make a decent turn' at total 2.25% provided I could get 3.65% on savings. Otherwise, I'd be forced to offset it fully again!