Are interest rates going to go up anytime soon?

Russe11

A friend in finance told me a lot was going on that seemed to be geared towards going to negative interest rates.

Glen_Clark

Russe11 wrote: »

A friend in finance told me a lot was going on that seemed to be geared towards going to negative interest rates.

We already have negative interest rates when inflation is taken into account.

System

Interests are at the lowest rate they have been since I was born in 1984. I have missed the boat. I would be quite happy with 7% interest which was available a few years back.

In 1980 you could get 18% interest!!! That would have been £240 a month for me.

It sucks. Have to settle for 3%.

grey_gym_sock

well, inflation was about 15% in 1980. so 18% interest would only give a real return of 3%. and if you paid tax on the interest, it would be a negative real return. just like now.

Russe11

grey_gym_sock wrote: »

well, inflation was about 15% in 1980. so 18% interest would only give a real return of 3%. and if you paid tax on the interest, it would be a negative real return. just like now.

don't talk sense, those that like the nominal amounts won't understand.:D

Linton

dburford9 wrote: »

Interests are at the lowest rate they have been since I was born in 1984. I have missed the boat. I would be quite happy with 7% interest which was available a few years back.

In 1980 you could get 18% interest!!! That would have been £240 a month for me.

It sucks. Have to settle for 3%.

In 1980 the annual RPI inflation rate ranged from 15% to 22%, so not much real difference to the present times.

System

too complicated for my brain. fair enough I must be happy with the amazing 3%.

innovate

What's complicated?

Interest rate is 18%. Inflation is 18%.
Annual interest on 100 is £18, inflation wipes off £18, leaving you with a net growth of £0.

Interest rate is 18%. Inflation is 22%.
Annual interest on 100 is £18, inflation wipes off £22, leaving you with a net loss of £4.

Interest rate is 3%. Inflation is 3%.
Annual interest on 100 is £3, inflation wipes off £3, leaving you with a net growth of £0

Interest rate is 2%. Inflation is 3%.
Annual interest on 100 is £2, inflation wipes off £3, leaving you with a net loss of £1

Not much difference between these scenarios, as has already been mentioned. Interest rates don't exist in isolation, there's always inflation to consider, too. When you achieve a net growth of £0 it doesn't matter whether your savings earn 3% or 15% or a million %.

Anyway, savings is not a good long-term place for your money:

Many people also still think that cash on deposit still represents the safe and sensible choice for those more interested in long-term accumulation of capital or enjoying a steady income.
However, looking back over 50 years it is clear that neither of these is true.

Source: http://www.bbc.co.uk/news/business-20032135

Thrugelmir

grey_gym_sock wrote: »

you seem to have confused the economy's problems with the banks' problems

While the BOE intervenes in the markets then its obvious that the economy is going to continue to struggle.

nilrem_2

Russe11 wrote: »

A friend in finance told me a lot was going on that seemed to be geared towards going to negative interest rates.

TBH I don't see why your friend should know, most experts don't have a clue what will happen.

Rates may go up they may go down or they may stay the same, that's about it!