Whinging.

RUN_RABBIT_RUN

oldvicar wrote: »

I think this is but the start of a trend of increasing mortgage (and savings) rates. I have some sympathy for mortgage payers linked to SVRs. As a saver I am rather more pleased at the prospect of higher savings rates, but regret that I think saver's joy will be bridled by inflation.

i think there's no doubt that mortgage rates will be heading upwards but i think banks will also look to maintain their margins once the boe base rate eventually starts going up.

i dont think savings rates will move up at the same rate though

HAMISH_MCTAVISH

Savers have been whinging incessantly for the last 3 years.

And I expect they'll keep doing so for many years yet.

This round of bank profiteering relies on squeezing both sides, not just borrowers.

ukcarper

How far will the banks push margins it wouldn't be good business to force borrowers to default especially if they are in negative equity

HAMISH_MCTAVISH

ukcarper wrote: »

How far will the banks push margins it wouldn't be good business to force borrowers to default especially if they are in negative equity

Correct.

Banks can't go all that far before further rises become counter-productive.

ILW

HAMISH_MCTAVISH wrote: »

Correct.

Banks can't go all that far before further rises become counter-productive.

Agree to a point, never stopped them with credit cards though.

Graham_Devon

oldvicar wrote: »

Acknowledging that BoE Base Rate is now ignored by the market sadly confirms to me that inflation is now out of control.

I think this is but the start of a trend of increasing mortgage (and savings) rates. I have some sympathy for mortgage payers linked to SVRs. As a saver I am rather more pleased at the prospect of higher savings rates, but regret that I think saver's joy will be bridled by inflation.

This could be the problem, and something I have been personally banging in about for some time, from my armchair.

With fuel going up, food will be next to follow. Sky News only today were reporting on the whole process of importing wheat to make flour, which in turn makes bread, which in turn gets shipped out to the shops, which in turn gets sold. The straw that broke the camels back however has just started to hit the wheat imports, in increased importing costs, so it won't be long at all until it's all filtered down to the customer.

Increasing mortgage rates will only increase the inflation, but luckily for the BOE, will hit RPI harder. Meanwhile, people are literally being priced off the road. District nurses and the local IT team for instance. The IT guy has stated he's having to look at switching jobs, he can't afford to drive around anymore (gets a mileage based contribution, but it isn't covering costs, especially as he does over 16,000 a year and gets a reduced rate later on). District nurses are having a hard time of it, as they get a much lower rate anyway. It's pretty dire when we are pricing people out of working.

I fully expect inflation to fall officially this month and next, however this is being created by falling one off items, such as electronics, white goods and the like. Shop price inflation this month showed food prices increasing 4.2%, but electronics etc reducing -1.8% (If i recall correctly). On top of all this, were still embarking on QE.

We could be heading for a point where mortgage rates have gone up, inflation in general is increasing, and the bank will be left stuck, unable to increase rates as it will no doubt be passed on to the customers through mortgage rates, increasing inflation again.

They have been left too low too long. It's certainly not set in stone, but what's happening at the moment with banks and products leaving the BOE rate behind is a clear sign that trouble could be stored ahead.

Over a year ago now I can remember stating an economist had stated we were playing with fire with rates this low for this long and it will all end in tears. He was of course dismissed as a doom mongering idiot.

yertiz_2

RUN_RABBIT_RUN wrote: »

the only indignant wailing i've noticed is from savers because banks have cut interest rates on their accounts, decreasing the free money they get. did all those people truly expect to be paid generously forever for doing nothing with their money?

The same could be said for property owners then.

oldvicar

ukcarper wrote: »

How far will the banks push margins it wouldn't be good business to force borrowers to default especially if they are in negative equity

HAMISH_MCTAVISH wrote: »

Correct.

Banks can't go all that far before further rises become counter-productive.

You think that will stop them?

Logic, common sense, and good business didn't stop the excesses of bank lending which got us in to this mess. What's to stop them going too far the other way, especially with regulators demanding they re-build balance sheets (get rid of lending) ?

oldvicar

Graham_Devon wrote: »

I fully expect inflation to fall officially this month and next, however this is being created by falling one off items

Me too.

But I'll be re-investing all those index-linked savings I bought 3 years ago when the headline RPI was zero or negative in more of the same/similar. Not done bad in the past 3 years, but expect them to soar as mortgage rates go back to normal and beyond. Buy on the dips

PaulF81

Graham_Devon wrote: »

This could be the problem, and something I have been personally banging in about for some time, from my armchair.

With fuel going up, food will be next to follow. Sky News only today were reporting on the whole process of importing wheat to make flour, which in turn makes bread, which in turn gets shipped out to the shops, which in turn gets sold. The straw that broke the camels back however has just started to hit the wheat imports, in increased importing costs, so it won't be long at all until it's all filtered down to the customer.

Increasing mortgage rates will only increase the inflation, but luckily for the BOE, will hit RPI harder. Meanwhile, people are literally being priced off the road. District nurses and the local IT team for instance. The IT guy has stated he's having to look at switching jobs, he can't afford to drive around anymore (gets a mileage based contribution, but it isn't covering costs, especially as he does over 16,000 a year and gets a reduced rate later on). District nurses are having a hard time of it, as they get a much lower rate anyway. It's pretty dire when we are pricing people out of working.

I fully expect inflation to fall officially this month and next, however this is being created by falling one off items, such as electronics, white goods and the like. Shop price inflation this month showed food prices increasing 4.2%, but electronics etc reducing -1.8% (If i recall correctly). On top of all this, were still embarking on QE.

We could be heading for a point where mortgage rates have gone up, inflation in general is increasing, and the bank will be left stuck, unable to increase rates as it will no doubt be passed on to the customers through mortgage rates, increasing inflation again.

They have been left too low too long. It's certainly not set in stone, but what's happening at the moment with banks and products leaving the BOE rate behind is a clear sign that trouble could be stored ahead.

Over a year ago now I can remember stating an economist had stated we were playing with fire with rates this low for this long and it will all end in tears. He was of course dismissed as a doom mongering idiot.

whats he driving, a range rover? I contribute 6p and recieve 22p per mile, but still easily cover 100% of fuel costs.


As for the price of oil, its global. Compare the price of the gbp to usd and import inflation should have gone down if global prices were static. We are suffering more due to american deficit spending devaluing the dollar rather than little ol uk keeping base rates low for too long.