Interest rates will rise faster and higher than anyone expects

grizzly1911

chewmylegoff wrote: »

errr. oh dear.

my point, in case you couldn't understand it, is that past performance is not an indicator of future performance, and that 18th century, 19th century or 20th century interest rates are of no relevance today.

And why not:question:

chewmylegoff

because there is no law requiring things to return to their historical "norms".

grizzly1911

chewmylegoff wrote: »

because there is no law requiring things to return to their historical "norms".

The same mistakes are still being made today as tthey were in the past we never learn as a society.

There is absolutely no reason why they will not go back their again.

For all our knowledge are we really any cleverer than we were centuries ago.

Greed is just as bad now, if not more so, as it has ever been - for instance.

chewmylegoff

grizzly1911 wrote: »

There is absolutely no reason why they will not go back their again.

this is correct, but at the same time there is also absolutely no reason why they will go back there again.

obviously, the interest rate will change in the future, but its future behaviour is not governed by the past.

grizzly1911

chewmylegoff wrote: »

this is correct, but at the same time there is also absolutely no reason why they will go back there again.

obviously, the interest rate will change in the future, but its future behaviour is not governed by the past.

I don't disagree with you all I would say is that things are cyclical and are just as likely to go back as forward.

Just like clown had stopped boom and bust, as all the previous governments expected they had and future governments hope they will.

Only things that are certain is that taxes will rise and we will die.

Graham_Devon

Reading this thread seems to be a mixture of extreme views from both those who see low interest rates as a good thing, and those that see them as bad.

We've got the usual "Most people are overpaying" and "I paid x amount in 2007" posts. Along with the usual talk of 15% rates.

What no ones mentioned is the real facts. Base rates at 0.5%, and yes there is overpaying. But there is also a rise in those in arrears. There is also a rise in those being moved to IO mortgages as they cannot afford the repayment, and the reposession prediction by the CML has been adjusted upwards, and that's based on rates not moving for the prediction period.

On the news tonight there was a commenter from the city. They always say from the city. Anyway, was quite refreshing, as while talking about base rates, he also talked about the high street and rents. He simply stated, quite refreshingly, there is not enough money to maintain the current systems. Therefore the high street is losing out, people can't afford houses, which is pushing rents up, which is only going to hit the same point that house prices hit, which is peak, and then trouble. It's simply unavoidable when the projection this year is to add a 9% rise on the 20% rise seen last year. 30% rises in rental is not sustainable, no matter how it's celebrated.

This forum always seems to miss the middle ground. And that commentator summed it up brilliantly, IMO tonight. Something has to give. We can't keep putting everything up, from rents, to general living costs, to massive increases in domestic fuel, to massive increases in transportation costs....There is nothing descreasing apart from the normal folks wages, and yes, ipods. People simply do not have the money to keep up. But no matter what your persuassion on the economy, the reality is exactly what he said.

I certainly feel as if the restbite from the recession has now ceased. The restbite actually made many much much better off through reduced mortgage costs, and I can see why so many are pleased. But what now?

The big stories, again this winter, unfortunately, are going to be the unfortunate in their homes choosing to forgoe meals, to keep themselves warm. Feel its going to be worse this winter.

grizzly1911

Graham_Devon wrote: »

Something has to give. We can't keep putting everything up, from rents, to general living costs, to massive increases in domestic fuel, to massive increases in transportation costs....There is nothing descreasing apart from the normal folks wages, and yes, ipods. People simply do not have the money to keep up. But no matter what your persuassion on the economy, the reality is exactly what he said.

I certainly feel as if the restbite from the recession has now ceased. The restbite actually made many much much better off through reduced mortgage costs, and I can see why so many are pleased. But what now?

The big stories, again this winter, unfortunately, are going to be the unfortunate in their homes choosing to forgoe meals, to keep themselves warm. Feel its going to be worse this winter.

You are right concurring that something has to give I wonder what that will be.

I get the feeling that it out of the hands of this countries Governments. They can tinker but that is it this country is in desperate need of adrenalin.

The Banks are berated for not lending when there is little good stuff to lend to in the first place. Do we really just want them drive people/companies into more debt misery and further write offs for the Government to bail out?

I watched that Child Poverty Documentary on Monday and it was disgraceful to think that we think of our selves as a world force yet we are ranked 18/22 in Europe for child poverty , those worse than us being ex eastern bloc.....:(

chucky

Graham_Devon wrote: »

What no ones mentioned is the real facts. Base rates at 0.5%, and yes there is overpaying. But there is also a rise in those in arrears. There is also a rise in those being moved to IO mortgages as they cannot afford the repayment, and the reposession prediction by the CML has been adjusted upwards, and that's based on rates not moving for the prediction period.

real facts???

why are you using base rates to relate the base rate to mortgage arrears, mortgage over payments, people moving to I/O mortgages, repossessions?

why don't you use the average mortgage rate and use real facts instead of the 'Devon real facts'...

Really2

Base rate will be more related to how you expect the economy to perform over the next few years.

Higher base rates are used to cool down heating up economies. (yes and inflation but I am getting to that)

Anyone see the UK going through a boom soon?

You may see limp reactions to inflation but the heady booms of the past are behind us, unless we become a leader in something new? (EG clean energy).
That is why I believe you will see rates well being below the average of the last 20 years for quiet some time.

DervProf

chucky wrote: »

real facts???

why are you using base rates to relate the base rate to mortgage arrears, mortgage over payments, people moving to I/O mortgages, repossessions?

why don't you use the average mortgage rate and use real facts instead of the 'Devon real facts'...

He's not using base rates to relate to anything. He's simply summarising a few facts and voicing his (reasonable) opinion.

Base rates at 0.5%, and there is overpaying. True.

There is also a rise in arrears. True.

"There is also a rise in those being moved to IO mortgages as they cannot afford the repayment, and the reposession prediction by the CML has been adjusted upwards, and that's based on rates not moving for the prediction period." I'm not so sure that all of this is true, but I don't think Graham is exaggerating. We've had the debtae the other day about the number of people switching to IO because of financial difficulties. I read another article the other day about the being an increase in IO borrowing of £110bn since 2007, it is hard to believe that a fair amount of that increase isn't due financial difficulties. I believe the CML has predicted an increase in repo's (not sure if that is based on no change in IR's though).