Looks like Interest rates could go up again this week

real1314

hmm, viewing the house price market without looking at the effectt that changes will have on the import/export market and on business in general is rather naive.

Higher interest rates = higher £££ value = Higher cost of exported products = reduced viability of uk industry.

So, loads of people out if work for lower house prices. If that's what you want. Some people are just wanting to make a profit at the expense of other peoples jobs though. STR? or just profit at the expense of jobs? Moral high ground shot to pieces.

roswell

And back to topic with interest rate predictions I gave up last month, I now just wait for the announcement.

if i was to make a personnal comment if my only target was inflation and i was 0.2% shy of needed to explain why I had missed my target id be raising by 0.5%

roswell

real1314 wrote: »

hmm, viewing the house price market without looking at the effectt that changes will have on the import/export market and on business in general is rather naive.

Higher interest rates = higher £££ value = Higher cost of exported products = reduced viability of uk industry.

So, loads of people out if work for lower house prices. If that's what you want. Some people are just wanting to make a profit at the expense of other peoples jobs though. STR? or just profit at the expense of jobs? Moral high ground shot to pieces.

Excellent post, Most people dont realise the reason they can borrow is because there is very few unemployed (The banks only lend money when there is plenty of money available (People with out income dont get mortgages)) When unemployment increases money is more rare ... and hence banks get very strict with lending.

So yes houses may be out your reach for your income at present, Ifthe average house price falls to 80 K But you dont have a job ... you still dont have a house.

$$$_12

real1314 wrote: »

Higher interest rates = higher £££ value = Higher cost of exported products = reduced viability of uk industry.

But:

Low interest rates = massive credit binge = higher inflation = jobs being exported to cheaper parts of the world/large social divide between that lived before the boom and so bought and the rest who didn't/couldn't

is totally fine? Even in the last recession - 90% of people still had jobs. I'll take my chances. In order to save a deposit to buy one of these ridiculously overpriced houses I'm living on a dole level budget anyway. If the average price was £80K - I'd be buying cash.

The last time RPI was this high - interest rates were quite a few percent higher than they are now. I've no real interest in CPI as it seems to be doctored (energy bills might come down? let's bump their weighting up).

$$$_12

manhattan wrote: »

I would rather buy when house prices are lower and interest rates are higher. So i too hope rates go up and up!

Indeed it's the size of the debt that counts - not the monthly repayment. I'd rather have a small debt but high interest rates (as they can only go down) than a large debt and low interest rates (as they can only go up). All things being equal - who does a large debt/low interest environment benefit? The banks - as they can squeeze you until the pips squeak.

mystic_trev

From todays Torygraph.

"With the Bank expected to increase borrowing costs for the fourth time in a year - possibly as soon as Thursday - economists have sounded the alarm over the market's strength. This comes after the revelation that disposable incomes rose at the slowest rate in 25 years in 2006"

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/02/nhomes02.xml

TTMCMschine

Mozette wrote: »

Thanks! I so look forward to having my home repossessed...

A dangerous thing to keep your fingers crossed and hope that the rates don't go up. A bit like not insuring your property or your things. Interest rates are historically low, and we are in abnormal times as far as property is concerned. To think that we wish for people to be reposessed is wrong - to hope that by raising rates we return to a more normal housing market is what most wish for. I don't see how any first time buyer can afford to buy no matter what their job is. I do hope if they rise a lot you can manage financially and that you aren't repossesed, however there are many, like ,myself with two small children, who can't afford to buy unless we get to more sensible levels.

JCR

I suppose the world today is everyman for himself unfortunately, it is dog eat dog. If you don't have a property and feel hard done by you wish that the interest rate would sky rocket to bring the housing market crashing down and leaving some people struggling (not necessarily investors) to pay the mortgage. There will be people on here clapping their hands with glee if the interest rate goes up again thinking "serves them right". They don't think that these people work hard, pay taxes (very high taxes) pay for national health (and often not getting much back, no available dentists). The people who are taking out of the system are often the whingers the one who want to see the hard workers and risk takers fall on their face and fail due to higher interest rates. You are not rewarded in this country for working hard, you have more disposable income if you say I can't get a job so can't afford a house, so all you tax payers, you pay for me. I know this is a bit of a rant and will be very unpopular from the pc brigade, but I just get so mad at the small mindedness sometimes.

Massive_2

Successful people make the very best of the prevailing situation, whatever that may be.

Those who sit on their hands and wait, invariably fail to achieve their aspirations. Times change, but there's always another excuse.

It is just those who call for an unprecedented hike or crash who are least resourceful and least equipped to take advantage of such changes.

A balanced, stable economy is most beneficial to all, and modest pre-emptive action is the best way to achieve this.

Generali

Massive wrote: »

A balanced, stable economy is most beneficial to all, and modest pre-emptive action is the best way to achieve this.

I definitely agree with that. However with Government borrowing and the trade deficit at record levels we do not have that situation. If the pound starts to fall (due to the UK having to finance the huge trade deficit for example) then I think we will see the MPC raise interest rates quickly.

FWIW, I think the most likely thing is no change at the next meeting but what do I know? I can see arguments for raising but don't think the MPC will do it.