Interest rates stay at 0.5% - No additional QE

Thrugelmir

ILW wrote: »

Or to put it another way, BoE have managed to lose most of the influence they used to have,

Influence over what currently?

RenovationWoman

mcc100 wrote: »

RenoMan is being treated for severe narcissistic symptons

Definition

An individual with narcissistic personality disorder exhibits extreme self-importance, inability to empathize with others and heightened sensitivity to criticism. Self-involvement and lack of empathy characterize this personality disorder.

People with narcissistic personality disorder are frequently perfectionists and need to be the center of attention, receiving affection and admiration, and controlling the situation. To get the attention he craves, he may try to create crises that return the focus to him. Like patients with antisocial personality disorder, this person places entitlement issues at the fore. He feels that the world owes him, regardless of whether he makes a contribution.

..... it is unlikely that he will ever appear on this forum again .

You may well be in for a surprise

ILW

Thrugelmir wrote: »

Influence over what currently?

Market IRs for a start.

pop_gun

Thrugelmir wrote: »

Wrong way round. Banks will entice savers in order to lend money to borrowers. Mortgage rates will reflect the rate paid to savers.

Having said that. Banks will only entice savers if there is demand to borrow.

There is always a demand to borrow. The last decade should be evidence enough of that. The credit worthy borrower however is a rare specimen and one the banks are eager to lend to.
I don't know how the banks will pitch higher mortgage rates and get homeowners to bite, unless the saving account rates are dependant on, taking on a mortgage with said bank.

wotsthat

ILW wrote: »

Market IRs for a start.

The BoE set the rate at which they'll lend to financial institutions - that's it.

I'm on the Nationwide BMR which, other than being guaranteed not to be more than 2% above BoE, is set by Nationwide at their discretion. I'll wager that the BoE have more influence than you think - my rate will increase on the same afternoon as the BoE increase their own. Do you want to bet against it?

Thrugelmir

ILW wrote: »

Market IRs for a start.

Same accusation could be made in many other countries.

Financial meltdown was global.

The interlinking of markets is now unwinding as international banks return home to their native markets.

Maybe some years before interest rates normalise. Japan being a good example of the after effects of a banking boom.

Graham_Devon

Thrugelmir wrote: »

Wrong way round. Banks will entice savers in order to lend money to borrowers. Mortgage rates will reflect the rate paid to savers.

Having said that. Banks will only entice savers if there is demand to borrow.

And as we have seen, Banks can ignore savers if something like Funding for Lending comes along.

We've seen massive falls in savings rates over the past couple of months. Apparently the best in the easy access savings tables are now 2.5%, down from 3.4%, as banks turn to cheaper money from the BOE.

sabretoothtigger

Maybe some years before interest rates normalise. Japan being a good example of the after effects of a banking boom.

I think it'll take a decade to sort out what they are doing currently and we havent even started to process it yet.

Imagine a world where we have to rely on China and Russia for setting monetary flows instead of USA because they have production, capital, oil and gas.
Eventually we might get control back but not unless people want stuff we sell in greater demand

Im glad to see London is the 2nd? largest foreign dealer for the Yuan because it might count alot more in future
http://www.reuters.com/article/2012/10/04/us-investment-yuan-idUSBRE8930CS20121004
http://www.ibtimes.co.uk/articles/403749/20121111/rqfii-qfii-china-csrc-guo-shuqing-safe.htm

Thrugelmir

Graham_Devon wrote: »

And as we have seen, Banks can ignore savers if something like Funding for Lending comes along.

Funding for lending needs to be kept in context. As it is purely for new lending. Does not underwrite the billions of pounds that banks require to finance existing loans and overdrafts.

Graham_Devon

Thrugelmir wrote: »

Funding for lending needs to be kept in context. As it is purely for new lending. Does not underwrite the billions of pounds that banks require to finance existing loans and overdrafts.

Funding for lending, is, all but for the name, IMO and the opinion of others, just more QE, under a different name.

The problem is. when does QE become a measure taken to stop a recession turning into a depression? It seems it already has, and it now being used to provide growth...and a miniscule amount at that.

It's certainly had an impact on savers anyway, even the banks admit this.