When interest rates finally rise

Looter

I've got a couple of fixed rate savings accounts which got me thinking about when interest rates will finally rise.

Tell me if I'm talking nonsense, but when the BoE interest rate rises, will it just increase by 0.5% anyway? I am under the impression that the rate either increases or decreases by just 0.5%, is this correct? If so, it will take a while for interest rates to get up to a decent level (from a saver's perspective anyway.)

opinions4u

Savers rates didn't drop by the same amount base rates fell by. So don't expect them to rise in the same way either.

Bank of England base rate can rise by more, or less, than 0.5% at a time.

FLAPJACK

There's talk of the B of E rate dropping to 0.25% before Dec...so any liklihood of savers rates increasing soon is VERY optimistic.

jimjames

Before 2008 interest rate movements tended to be in 0.25% increments in either direction. 2008/9 was by far the exception with the massive cuts in one go.

gkerr4

as jimjames says - it was more common to move it in .25% marks - but i can't see it changing a huge amount for a number of years - not enough to have any real effect on savers rates anyway.

Red_Cat

The way the second half of this year is likely to pan out, I reckon BOE base rates won't rise before Q3 2014 at the soonest.

guitarman001

I reckon rates will (unfortunately) be low for some time - too many people in debt with mega mortgages. I'm just saving what I can rather than taking out some cheap mortgage so that I pay off as much capital as I can pronto.

EchoLocation

Let's be honest, rates are not going up unless they're forced to raise them. Sad but likely true. I wouldn't imagine they'd drop them either though, that really would be an admission that we're stuck in the brown stuff. Not that we need one, but they can't con the markets forever.

guitarman001

The thrust of it is that they want mortgage debt down as mass defaults would kill the banks and thus the UK economy. However even if every mortgage-holder today paid their mortgages off tomorrow, the problem still remains that property relative to income is far too expensive, so nothing is becoming solved until prices come down (which they are, slowly). Inflation eroding house prices is not enough as wages need to grow. Same relative situation.

Sceptic001

Anyone here remember 16th September 1992?

Base Rate began the day at 10%, rose to 15% by mid-afternoon and then fell back to 12% by evening.

That's what happens when governments try to fiddle exchange rates. Thank goodness our political masters learned their lesson... Ooops, some of them didn't...

http://en.wikipedia.org/wiki/Black_Wednesday

BobQ

Rates will not rise, more likely to fall. Its a deliberate policy to disadvantage savers and to protect mortgage holders The former will only get frustrated but the latter will keep a roof over their heads or avoid negative equity. Rates will only rise when the economy grows, which without a Government Plan B will be ages.