Annual Prediction Thread for BoE Interest Rates

RenovationMan

It's virtually the end of 2011 so I thought I'd start one of those prediction threads that we like so much on the Economy board. My own VI is interest rates rather than house prices, so here is my BoE base rate prediction thread.

My own prediction is that the BoE rates will remain unchanged at 0.5% until this time next year.

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December 2012 BoE base rate Predictions

RenovationMan - 0.5%
Silvercar - 0.5%
DMFR - 0.5%
Heyman - 1.0%
brit1234 - 0.5%
JonnyBravo - 0.5%
michaels - 0.5%
oldvicar - 0.5%
nickj - 0.5%
vivatifosi - 0.5%
ILW - 0.5%
nearlynew - 0.5%
sss555s - 2.5%
Joeskeppi - 0.75%
grizzly1911 - 0.5%
PaulF81 - 0.5%
Sibley - 0.5%
HAMISH_MCTAVISH - 0.5%
Graham_Devon - 0.5%
DervProf - 0.5%
Dan: - 0.75%
MacMickster - 1.5%
SteveV2 - 0.25%
Thrugelmir - 0.25%
Running Horse - 12.5%
Pobby - 0.5%
Masomnia - 0.5%


Note: Anyone who commented on the thread but made no prediction has been marked as unchanged (0.5%).

silvercar

I agree - 0.5% for the year.

DMFR

Computer says.........0.5% for the foreseeable future, which is pretty $h!t if you have savings.

Heyman_2

1% at year end. I think this is the year that a rise will finally happen, rightly or wrongly.

brit1234

Depends on inflation. M king might not have an opportune if inflation goes still up.

Anyway interest rates are becoming less important, mortgage rates being more influenced by libor as a shortage of savings. Savings are getting bonus rates which keep creeping up as well.

JonnyBravo

No change for over 2 years.

That should please you RM. That's 24 opportunities to wind up a few people

michaels

I think 0.5% next year is going to be a lot less bad for savers than it was this year as we head closer to the deflation that Generali has been worrying about for a while. Only thing that might change this would be a bound market problem a la piigs but in that case it will almost certainly be IMF time and all bets are off.

I can't see the BoE responding to anything but domestic demand led price increases, everything else they seem to have decided is out of their remit.

oldvicar

0.5% for all of 2012, and probably 2013 besides.

My prediction is that the official rate will stay low at 0.5% for much longer than many people expect, and then that it will rise more quickly and much further than people are ready to contemplate, once inflation can no longer officially be denied.

Just as a qualification, market rates will increasingly de-couple from the official rate. As we have already seen, if banks are desperate for cash then they will pay depositors many times the official base rate.

nickj_2

i can't see how they can go up unless inflation gets out of hand , i don't think your average person on the street has the cash to spare , if they had , would we not after 2 or 3 years at 0.5% have had more impressive growth figures

vivatifosi

I'm also plugging for unchanged at 0.5%. Thanks Reno Man.

ILW

Is the BoE rate actually that relevant any more?

Most borrowing and savings rates seem to bear little relation.