Resentment against SVR hikes grows, Economists call for BOE to drop rates to 0%

HAMISH_MCTAVISH

ILW wrote: »

Is it not the case that companies making increased profits would help get the economy back to normal? Surely this applies to banks.

Only if the companies disburse those profits into the economy, via investment in expansion, job creation, and dividends to shareholders.

If they lock the money away and don't use it, then there is no benefit.

The same thing applies to banks.

If they are lending/spending dramatically more because they are making increased profits, then fine. But they're not.

They're just rebuilding their balance sheets and sitting on the cash. So it has no benefit to the economy at all.

ILW

HAMISH_MCTAVISH wrote: »

Only if the companies disburse those profits into the economy, via investment in expansion, job creation, and dividends to shareholders.

If they lock the money away and don't use it, then there is no benefit.

The same thing applies to banks.

If they are lending/spending dramatically more because they are making increased profits, then fine. But they're not.

They're just rebuilding their balance sheets and sitting on the cash. So it has no benefit to the economy at all.

So, the sooner they rebuild their balance sheets to the required level, the sooner they will be in a position to help the economy. Profit is a good thing.

Sibley

Nice one.
The banks shot themselves in the foot.

We'll have 0% now. Lovely.

Don't try and mess with homeowners.
We won't allow rates to rise.

Emy1501

HAMISH_MCTAVISH wrote: »

You made the assertion, either you can prove it or not.

Post the link.



Oh right then....

So we agree these rate rises won't impact house prices.

Good to know.



But the majority of mortgages are. So lowering rates to zero would indeed have an impact on liquidity.

I'd be surprised if the majority of mortgages would be affected by this and even if they were all you will see is rates and arrangement fees getting higher for new borrowers and those when their trackers end as few do trackers for more than 2 years

Sibley

I like how things are panning out.
We are showing the bears.

House prices will not drop.
Rents will rise and we will not allow high interest rates.

Have it!!!

nearlynew

Debt-junkies of the world - unite and take over.

PaulF81

weird things happen to the banks financial models when rates hit 0. its difficult to divide by it fo a start. 0.25% minimum i reckon, and with talk of ppi not dropping at the mo, not muchnof a chance either.

shortchanged_2

Hamish this sounds like the ramblings of a desperate man.

Many of your ilk on here stated that people would cope just fine with interest rate rises. This doesn't sound like the case now.

You sound like you're quite spooked by it all Hamish.

Thrugelmir

shortchanged wrote: »

Hamish this sounds like the ramblings of a desperate man.

I had the same thoughts. Is if Hamish was taking this lastest change in rates affected him personally. When nothing previously mattered. As house prices were going to eternally rise.

ILW

Thrugelmir wrote: »

I had the same thoughts. Is if Hamish was taking this lastest change in rates affected him personally. When nothing previously mattered. As house prices were going to eternally rise.

There does seem to be a hint of desperation is some of his recent posts.