Another interest rate likely!!

Jeewhizz

lisyloo wrote:

I don't think they predicted the January raise did they?

According to yesterday's Times, the shadow committee also voted for a rise at 5-4 - matching the BoE...

sarah_elton

lisyloo wrote:

Yes, it's an important point.
People coming out of 2 year deals may find their mortgage payments rising substantially.

Yep, I'm already planning what to do in January 2009 when my fixed rate ends (current rate 4.99% - I'll be in for a shock!).

RHemmings

desperadoV2 wrote:

According to BBC news, BOE may raise the interest rate by another 0.25% this thursday. which would make the interest rate at 5.50%

http://news.bbc.co.uk/1/hi/business/6329395.stm

I hope another interest rate hike would slow down the property market.

What say you?

I think it is unlikely. But I thought that it was very unlikely that there would be a rate rise in Jan. Make of that what you will.

mystic_trev

If CPI goes above 3% Merv has to write a letter to Gordon explaining why inflations got out of control, and what he's going to do about it. So if CPI's going up, they'll raise by 0.25%. If it remains the same (or goes down) they'll stick.

lisyloo

Yep, I'm already planning what to do in January 2009 when my fixed rate ends (current rate 4.99% - I'll be in for a shock!).

I wouldn't worry too much as the predictions for rises are fairly short term.
However it's good that you are planning ahead.

sanfrancisco

If not Feb, then definitely March.

lisyloo

Don't forget that Feb is one of the months that the BOE have their quarterly inflation report.
Changes have traditionally been more common in Feb, May, August and Nov.
e.g. August 2006, November 2006.

movieman

I wouldn't worry too much as the predictions for rises are fairly short term.

This time last year all the predictions I remember were for rate cuts, and we've had three rate rises since then. So you can't take any long-term predictions on rates seriously (including mine, of course).

Right now markets are expecting at least one more rate rise in the short term, beyond that no-one can say for sure; personally, though, I don't think we'll see another rate cut for years as inflation comes through the system into prices and wage demands. If they hadn't cut rates so low or had raised them far more aggressively then inflation could have been controlled, but now they're probably going to have to push rates way up to stop it.

mystic_trev

movieman wrote:

I don't think we'll see another rate cut for years as inflation comes through the system into prices and wage demands.

And there lies the crunch! All those people with Fixed rates (many with IO such as Lynz had) expiring in the next few months and years, unable to meet the new repayments - could be a disaster? Unfortunately most homeowners haven't been as shrewd as Lynz in planning ahead. I also wonder how many are up to their ears in unsecured debt?

lisyloo

I agree that there are some people who have taken on too much debt.
The real question is whether the number is enough to push us into recession.
If we do get a bad recession then that will be bad for some individuals but it will be deflationary as a whole, so we could get cuts.

Don't forget that inflation is measured on a yearly basis and there is some good news on that front as far as energy goes.