Interest rates could start to rise soon - Andrew Sentance

GeneHunt_2

Generali wrote: »

Interest rates are unlikely to rise because the oil price does. Higher oil prices act like a tax by a foreign country on the UK now she is no longer a net exporter which has the same effect on the wider economy as increasing interest rates.

So you don't think UK interest rates are about to rise?

Sampong

GeneHunt wrote: »

So you don't think UK interest rates are about to rise?

Moneyweek magazine sent a promotional video out the other day trying to sell subscriptions. It was a sales pitch for the magazine of course but they made some interesting points about the state of the housing market (and financial markets in general).

One thing they did mention is that Mervyn King "hinted" at the last MPC meeting that Interest Rates could rise as soon as May.

What he actaully said I don't know, but I do think it's taking a blinkered view to assume that Interest Rates will remain at this (artificially) low level.

Nobody really knows what's going to happen, myself included - but if rates do move there is only one direction they can really move

.......unless of course they decide to slash them to 0.25% - unlikely.

If anyone knows what Mervyn King said at the last MPC meeting I would be interested to hear that.

wotsthat

Sampong wrote: »

If anyone knows what Mervyn King said at the last MPC meeting I would be interested to hear that.

I think it's this...

The MPC's-central judgement, under the assumption that Bank Rate increases in line with market expectations, remains that, as the temporary effects of the factors listed above wane, inflation will fall back so that it is about as
likely to be above the target as below it two to three years ahead.

It shows just how crap the media is. It's not a hint at all - it just took one publication to say he'd hinted at a May increase and the rest followed like sheep.

He also, quite bluntly, said this - rate rises imminent surely....

Writing in Scottish daily newspaper The Herald King said: "I do not know for how long interest rates will remain so low. But at some point they will return to more normal levels and it would be wise to take this into account in your financial planning."

....not necessarily - he said that in October 2009.

noodle_doodle

E.King wrote: »

More and more people are saying this now. I do not think they will rise much before [STRIKE]2010 2011 2012 2013[/STRIKE] 2014, but then its going to shock quite a few how quick and much they will go up back to more normal levels.

People have been saying this since they went down. But would it actually make a difference to the mortgage rates you or I get?

Back in oct 2006, when the base rate was 4.75%, I got a 3-yr fixed rate that was 5.25%. When it finished, the base rate had dropped over four points to 0.5%, but the best fixed-rate I could get was 3.74%, only one and a half points down on my previous fix. All the base rate trackers plus 1% type deals were killed with a hammer when the banks realised they weren't making any money out of them. As an example, Santanders variable rate - 4.24% - is higher than most of its fixed rates now.