Base Rate Remains Unchanged

robmatic

heathcote123 wrote: »

How long is your fix?

Another 2 years to go.

gailey_2

Cleaver wrote: »

Sure, it was here, a few posts ago:





I would remonstrate with absolutely anyone who takes delight at making money through something that causes many more people hardship. And I'm not really sure you can compare the BOE base rate with any of the above examples. All I was saying was that people such as Turnbull saying "equity rich owners are in for a fabulous few more years" is short-sighted in the extreme. I guess we're equity-rich owners, so low base rates make our mortgage very cheap. But at what cost? As I've already said it's at a cost to the overall economy. Job security, payrises and difficult for people like my wife who are self-employed.

It's not rocket science to point out that celebrating our economy being f*cked isn't exactly the done thing, is it?

Couldent agree more such a sensible attitude.

I worry about low interest rates as it hurts savers and inflations so high.

i worry the low interest rates mainly benefit those with wealth and equity.

it benefits the banks
people with consumer debt ie not morgage pay high interest rates no relation to base rate.

I have heard of a few people paying mad morgage rates of £100 as they brought in the 1990s.
But those who brought last 5years paying more than we pay in rent even with low interest rates mainly as they brought at height and put down 10%deposit or less.

Think rates need to go up gradually as what little wealth uk does have should be shared.

Jennifer_Jane

Isn't it the low interest rates which have kept the Pound low? (And the Euro surprisingly high?). I thought it was all to do with Growth vs Inflation, even if there is such little growth at the moment?

ILW

The whole financial crises is caused by debt. Low IRs encourage debt and discourage saving. If rates had been higher some years ago the whole crisis would not have happened.

Cleaver

ILW wrote: »

The whole financial crises is caused by debt. Low IRs encourage debt and discourage saving. If rates had been higher some years ago the whole crisis would not have happened.

I'm no expert in this area, but my understanding is that the world financial crisis was brought on by quite a few more factors than just low interest rates. And because of that I'm not convinced that higher interest rates would have stopped what happened.

DervProf

ILW wrote: »

The whole financial crises is caused by debt. Low IRs encourage debt and discourage saving. If rates had been higher some years ago the whole crisis would not have happened.

Spot on.

However, I do agree with Cleaver's comments that it may not have been just low interest rates that caused "the boom", then "the crunch".

It seems to me that post 9/11, there was a reduction in IRs and loosening of financial control to prevent problems with the US, and indeed the worldwide economy. As far as I saw it, this worked, and probably a little to well, because those who controlled the purse strings thought "this is good, maybe we should continue like this". That's the problem with humans, we don't want to see the good times come to an end, even if it is for our future benefit (see the legacy of New Labour for evidence of this). Tighter financial controls, and maybe a slight increase in IRs may well have prevented, or at least lessened the severity of the credit crunch.