UK interest rates held at 0.5% for years

oftm

vacheron wrote: »

Well I've admitted defeat having just logged in to my online banking to find that my variable rate ISA has dropped from an already miserable 2.6% to 1.3% in the last week so I'm going to call an architect today and spend a big chunk of my savings on a kitchen extension I've been sitting on the fence about for some time now.

No point in sitting around watching inflation erode my best efforts at 1-2% per year when we could be enjoying something tangible.

Inflation's not that bad compared to savings rates so I'm doing the opposite by spending as little as possible. It's mostly just food I spend money on now and I get all the deals when doing that. They won't force me into spending money on 'things' I don't need nor want.

FLAPJACK

oftm wrote: »

Inflation's not that bad compared to savings rates so I'm doing the opposite by spending as little as possible. It's mostly just food I spend money on now and I get all the deals when doing that. They won't force me into spending money on 'things' I don't need nor want.

Here Here!!

What ever savings are spent now will take a very long time to replace.

sabretoothtigger

oftm wrote: »

They won't force me into spending money on 'things' I don't need nor want.

If you wont spend your money then someone else will spend it for you.
Reminds me of an old cartoon with alchemy, they turn leaves to gold.
After they spend it everyone finds overnight its turned back to leaves. Dust to dust, BOE's gold pounds go back to simple paper

guarantee only lasts 31 days

The BOE lacks the assets of an insurance company capable of guaranteeing the outcome of anything substantial. Equitable life had a guarantee and it was much more modest then anything espoused by those in politics

If they did have assets to match promises written I would be more confident, I dont blame Carney his words fit today

talexuser

The problem with this is the unemployment figure which can easily be massaged. The claim of a million new jobs since the election seems to be tainted by the survey that there are a million zero hour contact jobs around (little more than serfdom in practice), many times the official government estimate. These people do not work full time and do not have a civilised living wage or pension benefits etc, it's just pin money jobs really.

So they can massage unemployment and massage inflation by selective basket choosing to pursue the "secret" inflate away the debt policy?

lvader

So they are going to cheat the unemployment figues and increase rates sooner? How does that help with inflating away debt?

Glen_Clark

xylophone wrote: »

Just what a low interest rate policy is designed to encourage?

You'll be employing an architect, a builder and throwing the cash about in the kitchen dept at John Lewis....

All that lovely NI and income tax and VAT flowing into Georgie's coffers......;)

Who knows what its designed to encourage because you can't believe a word they say.
The stated aim is to increase lending to business, which has failed spectacularly because lending to business is actually down on last year.
It all appears to be going on puming up MPs property portfolios as usaual.
If they really wanted to create work for builders etc they could relax or speed up their planning process. But then that would lead to a fall in house prices. Wheras everything they do leads to a rise in housing costs. But they won't even use that phrase, for rise in house prices they say something like 'revive the housing market'

lvader

Glen_Clark wrote: »

Who knows what its designed to encourage because you can't believe a word they say.
The stated aim is to increase lending to business, which has failed spectacularly because lending to business is actually down on last year.

Lending had to go down due to new banking rules on capital reserves. That is why they had to encourage lending otherwise it would have dropped even further.

vacheron

oftm wrote: »

Inflation's not that bad compared to savings rates so I'm doing the opposite by spending as little as possible. It's mostly just food I spend money on now and I get all the deals when doing that. They won't force me into spending money on 'things' I don't need nor want.

In our defence we did want it in this case, but that last rate drop was all that was needed to tip the balance and get me to pick up the phone.

Thrugelmir

lvader wrote: »

Lending had to go down due to new banking rules on capital reserves.

Banks create money, i.e. by fractional reserve banking. Lending had to brought back into line. Otherwise GF2 would have been a real possibility.

Glen_Clark

lvader wrote: »

Lending had to go down due to new banking rules on capital reserves. That is why they had to encourage lending otherwise it would have dropped even further.

They are lending less to business, yet throwing money at the housiing market!!