Raise rate to get things moving again?

ILW

RenovationMan wrote: »

I said 'right now', so the time frame is now.

Also depends on you definition of "benefit the economy". If that means helping a smaller problem now which leads to an even bigger problem in the future, is that a benefit or not?

RenovationMan

ILW wrote: »

Also depends on you definition of "benefit the economy". If that means helping a smaller problem now which leads to an even bigger problem in the future, is that a benefit or not?

You're over analysing it and I suspect trying to push a houseprice VI?

Do you basically think that the UK economy will benefit (i.e. grow) because we have increased BoE interest rates? If so, why?

ILW

RenovationMan wrote: »

You're over analysing it and I suspect trying to push a houseprice VI?

Do you basically think that the UK economy will benefit (i.e. grow) because we have increased BoE interest rates? If so, why?

I have no VI in house prices (mortgage paid and not planning on moving), but do believe that most of our current problems stem from overborrowing (individuals and nations) which was encouraged by too low interest rates for too long.
I also hate the thought of inflation destoying peoples savings and pensions.

RenovationMan

ILW wrote: »

I have no VI in house prices (mortgage paid and not planning on moving), but do believe that most of our current problems stem from overborrowing (individuals and nations) which was encouraged by too low interest rates for too long.
I also hate the thought of inflation destoying peoples savings and pensions.

That's fine, but do you think that raising rates as the OP has suggested will help the economy as it stands right now? If so, then how?

ILW

RenovationMan wrote: »

That's fine, but do you think that raising rates as the OP has suggested will help the economy as it stands right now? If so, then how?

I doubt it would help the economy right now, but may save future disasters. People are getting too used to ultra low rates and possibly need a reminder occasionally to control their sentiments.

RenovationMan

ILW wrote: »

I doubt it would help the economy right now, but may save future disasters. People are getting too used to ultra low rates and possibly need a reminder occasionally to control their sentiments.

So would you raise BoE rates to 'remind' the few people lucky enough to be on low rate tracker mortgages to not get used to low rates, even though it would jeopardise the wider economy?

Do you really think that a few mortgage holders have such an impact on the UK economy that they need to be reined in at the expense of business, commerce, industry?

Thrugelmir

ILW wrote: »

People are getting too used to ultra low rates and possibly need a reminder occasionally to control their sentiments.

On one hand lower interest rates appear great , on the other a squeeze on disposable income that could last for some years. So while borrowing is perceived to be cheap, the capital will still need to be repaid.

The BOE can only pump so much QE (liquidity) into the banking system. Which at the moment is helping hold asset prices stable.

We increasingly do seem to be heading for a Japanese style period of stagnation. Unless new impetus is injected into the economy.

ess0two

Perhaps low rates are the new norm?

Its anybodys guess,did'nt the ecb raise rates last yr and it back fired on them?

The days of living off interest from savings without taking a risk has gone,people are gonna have to take some risk.

Thrugelmir

ess0two wrote: »

The days of living off interest from savings without taking a risk has gone,.

When was this ever possible?

As inflation erodes the value in time.

ess0two

Thrugelmir wrote: »

When was this ever possible?

As inflation erodes the value in time.

Its often raised in here as a valid reason for helping the indebted and pushing savers into poverty.