Low rates are now endangering the economy

ILW

We just lurch from one crisis to the next. Nobody is interested in more than a couple of years ahead. Very different attitude to Germany.

wotsthat

Graham_Devon wrote: »

What she wants is to start raising rates now in order to reduce the problems in the future that have been built up today.

She makes her point pretty well IMO.

She was a regular on BBC Radio and always makes a good point.

However, what she wants is increased rates now so that older people will see increased (risk-free) returns on deposits and increasing annuity rates. She's long been involved in pension policy and a champion of the interests of older people. She spent many years convincing government that the losses of private pension schemes should be socialised.

So whilst she may be identifying potential problems for the future her immediate priority is to increase pensioner income. Nothing wrong with this of course but worth bearing in mind.

I was getting, from memory, 7.2% risk-free on a Nationwide savings bond in 2007. Yes it would be great if I could still get this but we should have learnt that risk free returns are anything but. We're returning to 'normal' which is no risk/ no return.

Loughton_Monkey

Graham_Devon wrote: »

....

The policy of financial repression is forcing everyone to become speculators in order to make a return.

I just love this bit.

Ros Altmann: "Ultra low interest rates are distorting the economy...."
Journalist: "Britain’s “blinkered” policy on interest rates...."
Graham Devon: "The policy of financial repression...."

Why not go the whole hog and call it "Apocalyptic economic meltdown...."? Or are you saving that for later when reporting that Carney didn't read the article and so kept the rates unchanged?

I happen to be a 'saver' [and an investor]. Whilst I can see a 'lure' to consider pumping a bit more from savings to investments, I hadn't (until this post) noticed that I am being forced to do it. Must have missed that.

You have told us that "everyone" is being forced to speculate. So can you be more precise and tell us what is forcing non savers [of whom there are millions] to speculate?

HAMISH_MCTAVISH

Graham_Devon wrote: »

What she wants is to start raising rates now in order to reduce the problems in the future that have been built up today.

No.

What Ros Altman wants to do is raise interest rates so the people she represents can get more risk free money.

She wants savers to get high risk free returns from banks, and for banks/government to take on that risk of default, instead of savers having to invest directly in higher risk products such as equities, property, or business investment to get higher returns.

To be fair, she's pretty open about her Vested Interest, as head of SAGA it would be hard to conceal it.

wotsthat

Graham_Devon wrote: »

Though apparently "economists" are penciling in another statement from the bank today reinforcing their forward guidance for a third time, as the bank battles with the market and faces losing credibility in the wake of the upbeat data.

Just to keep your hopes up..

I recently fixed for 5 years with Nationwide. They've re-jigged the way the site issues mortgage quotes and seem to have increased their five year rates a touch. What was a 2.99% fee free deal is now a 2.89% deal with a £900 fee. The fee free deal is now 3.09%.

Graham_Devon

wotsthat wrote: »

She was a regular on BBC Radio and always makes a good point.

However, what she wants is increased rates now so that older people will see increased (risk-free) returns on deposits and increasing annuity rates. She's long been involved in pension policy and a champion of the interests of older people. She spent many years convincing government that the losses of private pension schemes should be socialised.

What she wants is what she states in the article.

We all know her link to Saga. But she was employed by the BOE too.

There is really no need to ignore everything she stated and then speak for her, telling us what she actually wants when she clearly states what she wants to see.

If all she had talked about is pensioners, then you would have a point, but clearly that's not what she is doing. She's looking at various issues, savers being just one of these issues, so I'm not too sure why you are trying to convince either us or yourself that's what she is stating.

It's interesting that all those who want to see house price increases are trying to convince others that what she stated isn't actually what she wants.

The key point being, none of you are willing to discuss what she stated. Simply all to eager to ignore it.

Silence is worth a thousand words.

wotsthat

Graham_Devon wrote: »

There is really no need to ignore everything she stated and then speak for her, telling us what she actually wants when she clearly states what she wants to see.

Graham, Graham, Graham - what people 'state', what they mean and how they're reported can be very different things. You're coming off the back of a thread where this was amply demonstrated so I can't imagine this is in dispute.

I've ignored nothing she said but simply attempted to work out what she means, why she said it and what her priorities might be given her potential bias.

CLAPTON

Graham_Devon wrote: »

Considering in 5 years time those taking help to buy today will likely face higher rates when they come to remortgage or stay on the same mortgage (due to interest rates rising) and then have to start paying the deposit loan back at the same time, there is potential for issues there.

the equity htb system doesn't require the deposit to be paid back after 5 years or indeed until you sell or the mortgage term ends.

After 5 years one starts to pay 'fees' on the deposit amount.

Loughton_Monkey

Graham_Devon wrote: »

What she wants is what she states in the article.
.....

There is really no need to ignore everything she stated and then speak for her, telling us what she actually wants when she clearly states what she wants to see.

Such faith must be bliss.

I really, really, want to see Santa Claus this year. Which reminds me. What do you want for your first birthday, which, by deduction, is on 4th Spetember 2014.

Graham_Devon

CLAPTON wrote: »

the htb system doesn't require the deposit to be paid back after 5 years or indeed until you sell or the mortgage term ends.

After 5 years one starts to pay 'fees' on the deposit amount.

You are correct.

Maybe it would have been easier if I had said "service the loan", so that something else couldn't be found to nitpick on?

I will, of course, reflect on this.

Good lord, this forum is tiring. Either way, they will have increased costs due to the loan which was my overarching point. Again, no one is willing to discuss any of this, just willing to nitpick and try and suggest she meant something else.