MSE News: Base rate held at 0.5% again 7 April 2011 at 12:01PM in Savings & investments 8 replies 2.3K views

Former_MSE_Helen

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Base rate held at 0.5% again

Mr_h

MSE_Helen wrote: »

This is the discussion thread for the following MSE News Story:

Read the full story:
Base rate held at 0.5% again

Hmm. I suspect that the MPC will be increasing the Base rate this May.

This is because NS&I will be offering a new issue of index-linked savings certificaes this May, i.e. they will be re-introducing them, and (according to MoneyWeek) everytime the MPC changes the base-rate, NS&I are obliged to offer a new issue of index-linked savings .

Aegis

Mr_h wrote: »

Hmm. I suspect that the MPC will be increasing the Base rate this May.

This is because NS&I will be offering a new issue of index-linked savings certificaes this May, i.e. they will be re-introducing them, and (according to MoneyWeek) everytime the MPC changes the base-rate, NS&I are obliged to offer a new issue of index-linked savings .

That doesn't really follow... I'm also pretty certain there wasn't a new issue of ILSCs every time the base rate was cut on the way down from 5.75%.

Ultimately the MPC will raise base rates when they feel the time is right, not just because NS&I issue a new product.

Gray_colt

Dont worry people the MPC are in no rush to hike interest rates! Why would they on the wages they get lol. Im just glad im not old or a saver. The MPC isnt indepentant and expect 0.5% to be here for many years yet. Its helping those poor borrowers out so its not all bad hey

Old_Git

oh dear my mortgage will still be 0.18 above the 0.5% .
another month of £27.99 mortgage

blades123

By keeping the rates the same it is really affecting the value of the pound, esp the exchange rate between the pound and the Euro. The euro has raise it's interest rates to 1.25% making it more attractive offer than the pound. There will be a lot of annoyed holiday makers this year when their pounds are worth even less on the mainland

Milarky

Aegis wrote: »

Ultimately the MPC will raise base rates when they feel the time is right, not just because NS&I issue a new product.

Rather, one gets the impression that the MPC will raise base rates only when all its wiggle room has been finally removed - and the proverbial water is lapping at their chins. The ECB rate move this week was signposted - and probably timely too - Germany is booming without any 'competitive' devaluations which didn't seem to last, did it? - they never do.

A few years ago, Eddie Meyer was on Newsnight lamenting the French for all their restrictive practices and claiming the country was 'running on empty'. Well, if that's 'running on empty' I'd like to know how to describe what our policy-makers get up to!

But the May date has been on the cards for some time, now....

lvader

blades123 wrote: »

By keeping the rates the same it is really affecting the value of the pound, esp the exchange rate between the pound and the Euro. The euro has raise it's interest rates to 1.25% making it more attractive offer than the pound. There will be a lot of annoyed holiday makers this year when their pounds are worth even less on the mainland

You might be interested to know that the pound/euro exchange rate is pretty much exactly the same as 12 months ago and vs the USD the pound is up 6%.

dqnet

Well I hope it stays low as long as possible... that way my tracker mortgage will be nice and tidy..