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Interest rates could start to rise soon - Andrew Sentance
GeneHunt_2
Posts: 286 Forumite
This was not a great surprise to me. Over a year ago, I warned that the underlying inflation picture was not as good as most of my MPC colleagues thought at that time. And when the MPC relaunched its QE programme last autumn, I warned that inflation could get stuck at around 3-4pc this year instead of falling below target as the Bank’s forecast suggested.
Thinking on the MPC now seems to be moving in this direction. The minutes of the April meeting showed that “arch-dove” Adam Posen had dropped his call for more QE. In a subsequent newspaper interview, Posen was quoted as saying that the Committee was “taking seriously” the persistence of measures of “core” inflation at around 3pc.
The first official estimate of economic growth for January to March will be published this week. But whatever GDP shows, the evidence in the first quarter is that the economy is growing – slowly. Rising interest rates could soon be back on the agenda.
http://www.telegraph.co.uk/finance/economics/9218565/Interest-rates-could-start-to-rise-soon-Andrew-Sentance.html
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Comments
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More and more people are saying this now. I do not think they will rise much before 2014, but then its going to shock quite a few how quick and much they will go up back to more normal levels.0
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More and more people are saying this now. I do not think they will rise much before 2014, but then its going to shock quite a few how quick and much they will go up back to more normal levels.
I think they'll start rising soon....as the inflation rate is bound to start rising further from the rise in the oil price (and the VAT effect has now gone....).0 -
More and more people are saying this now. I do not think they will rise much before 2014, but then its going to shock quite a few how quick and much they will go up back to more normal levels.
Rates cannot rise.
No really!! and they will not rise. And even if they have to be adjusted the rises will be tiny.
And I am saying this as a property bear, so many people are on the edge that a return to normal rates would cause a property crash of the magnitude that even I would not even want to see.
There are many who took on new mortgages pre 2007 when their calculations were based on rates that were much higher than today would not survive if they just went back to what they started with.
And if rates were allowed to rise to more normal then I have no doubts that the pound would the have to be devalued.0 -
More and more people are saying this now. I do not think they will rise much before 2014, but then its going to shock quite a few how quick and much they will go up back to more normal levels.
Indeed. What sort of asset could we invest in to protect us from these massive rises, the 480pw housing benefit cap etc?0 -
homelessskilledworker wrote: »Rates cannot rise.
No really!! and they will not rise. And even if they have to be adjusted the rises will be tiny.
And I am saying this as a property bear, so many people are on the edge that a return to normal rates would cause a property crash of the magnitude that even I would not even want to see.
There are many who took on new mortgages pre 2007 when their calculations were based on rates that were much higher than today would not survive if they just went back to what they started with.
And if rates were allowed to rise to more normal then I have no doubts that the pound would the have to be devalued.
Rates have to rise.
No really!! and they will rise. And even when they have do to be adjusted the rises will be far bigger and come faster than most expected, just like they fell far more and quicker than most expected.
And I am saying this as a property bear, so many people are on the edge that a return to normal rates will cause a property crash of the magnitude that even I would not even want to see.
There are many who took on new mortgages pre 2007 when their calculations were based on rates that were much higher than today would not survive if they just went back to what they started with.
And if rates were allowed to rise to more normal then I have no doubts that the pound would the have to be devalued
Every one is getting scared now that its looking likely interest rates are going back up to normal. You will see more articles coming out saying its dangerous to raise interest rates too much. It is dangerous but still going to happen. Lower house prices here we come!0 -
"Finantial".This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Quick, buy shiny metals....:money:
It appears that a certain shiny yellow metal has risen in value quite a lot over 1 and 5 year time frames. Certainly more than most domestic property anyway.
You appear to dismiss gold and silver investment Hamish. Is this because you "missed out" ? Does the idea of someone investing in precious metals bother you, as that money could have been put into property instead ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
It appears that a certain shiny yellow metal has risen in value quite a lot over 1 and 5 year time frames. Certainly more than most domestic property anyway.
You appear to dismiss gold and silver investment Hamish. Is this because you "missed out" ? Does the idea of someone investing in precious metals bother you, as that money could have been put into property instead ?
Oooh, nice attempt at trolling DP.
Silver is down 32% in the last year alone. And that's before you factor in the VAT. The actual loss for selling bullion to a broker is more like 50%.
Had you sold your house and bought silver a year ago, you could buy back less than half a house today.
Gold is also down in double digits from peak, although granted not as bad as silver, still more in 10 months than houses in the last 4 years....
Not exactly stable or safe investments...... Particularly given the yield is zero.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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