Interest rates to hit 1.25% by year end

1984ReturnsForReal_2

myhouse wrote: »

which left uncontrolled will also damage the economy.

Which the Bank of England can do nothing about & raising rates will have zero effect at best & a big negative effect at worst.

The Bank of England raising rates will not reduce taxation or global prices.

Mr_Mumble

The market did take King's comments as being bullish for rate hikes, take a look at Sterling vs other currencies on the day:

Currencies

GBP/USD 1.6125 +0.0090 (0.56%)
GBP/EUR 1.1957 +0.0069 (0.58%)
GBP/JPY 135.1110 +1.5554 (1.16%)
GBP/HKD 12.5670 +0.0664 (0.53%)
GBP/CNY 10.6238 +0.0463 (0.44%)
GBP/AUD 1.6186 +0.0196 (1.23%)

If we don't get rate rises in the first half of the year Sterling will tank leading to higher inflation. UK homeowners lose either way. Higher debt repayments or lower real value of the asset.

System

For "hit" read "gently nudge".

gagahouse

Mr_Mumble wrote: »

The market did take King's comments as being bullish for rate hikes, take a look at Sterling vs other currencies on the day:

Currencies

GBP/USD 1.6125 +0.0090 (0.56%)
GBP/EUR 1.1957 +0.0069 (0.58%)
GBP/JPY 135.1110 +1.5554 (1.16%)
GBP/HKD 12.5670 +0.0664 (0.53%)
GBP/CNY 10.6238 +0.0463 (0.44%)
GBP/AUD 1.6186 +0.0196 (1.23%)

If we don't get rate rises in the first half of the year Sterling will tank leading to higher inflation. UK homeowners lose either way. Higher debt repayments or lower real value of the asset.

I think King sent a pretty clear message to the market that he agreed with their pricing in the forward rates market - expect at least two 25bp rises this year. I don't really care whether the rise is justified or not, the BOE will raise rates to restore its "credibility" and "manage expectations" regardless.

RenovationMan

AD9898 wrote: »

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.

Your desire to see people struggle is almost palpable. I can almost see the tremble of excitement in your keystrokes. Perhaps your not as happy and content with your life as you keep telling us? Perhaps you need to have your decision to 'settle/give up' to be validated by being able to point to a few unfortunate people who get repossessed?

ILW

RenovationMan wrote: »

Your desire to see people struggle is almost palpable. I can almost see the tremble of excitement in your keystrokes. Perhaps your not as happy and content with your life as you keep telling us? Perhaps you need to have your decision to 'settle/give up' to be validated by being able to point to a few unfortunate people who get repossessed?

Anyone that is going to struggle due to a .5% rise in rates is an idiot for putting themselves in that position in the first place.

ukcarper

gagahouse wrote: »

I think King sent a pretty clear message to the market that he agreed with their pricing in the forward rates market - expect at least two 25bp rises this year. I don't really care whether the rise is justified or not, the BOE will raise rates to restore its "credibility" and "manage expectations" regardless.

How good will its credibility be if it pushes us back into recession?

RenovationMan

ILW wrote: »

Anyone that is going to struggle due to a .5% rise in rates is an idiot for putting themselves in that position in the first place.

Actually, the person I was responding to believes that people will struggle, not me. I'm commenting on the fact that s/he cant wait for reposessions and misery for home owners, not about whether I think it will actually happen.

I'm finding that this part of the forum is becoming increasingly mean-spirited.

ILW

RenovationMan wrote: »

Actually, the person I was responding to believes that people will struggle, not me. I'm commenting on the fact that s/he cant wait for reposessions and misery for home owners, not about whether I think it will actually happen.

I'm finding that this part of the forum is becoming increasingly mean-spirited.

In the end, one persons price increase is anothers extra profit etc.
Virtually all scenarious regarding house price, interest rates et al produce winners and losers. Just depends which side ot the fence you happen to be on at any particular time.

Percy1983

RenovationMan wrote: »

Actually, the person I was responding to believes that people will struggle, not me. I'm commenting on the fact that s/he cant wait for reposessions and misery for home owners, not about whether I think it will actually happen.

I'm finding that this part of the forum is becoming increasingly mean-spirited.

I must say I am also mean spirited by your standards, I don't want 15% interest rates and a massive fallout, but I want a more 'normal' interest rate to which there will be some fallout. With that if I can't afford something I don't expect to keep it so why should overstretch home owners keep there homes? yes its unfortunate but it has to happen, we can't bail them out forever... can we?