When Will Rates Rise?

grizzly1911

When they have to.

The same as when you really need to go, nothing else will matter.

michaels

HAMISH_MCTAVISH wrote: »

Latter, dear boy.

That the later will happen is inevitable.

But I digress....;)

Mervyn King explained it rather well when he said....

Not being one who normally makes any typos I apologide profussely

However I think quoting Mr King agreeing with me does not strengthen your argument. The tightening of margins will result in a larger increase in base rates being required to achieve the necessary fiscal tightening, it is not coherent to argue both that rates will only need to increase a little to achieve a fiscal tightening and that most of any increase in rates will be counteracted by a tightening of margins....

brit1234

Mortgage rates will continue to creep up as QE happens less often and is phased out.

HAMISH_MCTAVISH

michaels wrote: »

Not being one who normally makes any typos I apologide profussely

Yes, I wondered if you too had bought an ipood...;)

it is not coherent to argue both that rates will only need to increase a little to achieve a fiscal tightening and that most of any increase in rates will be counteracted by a tightening of margins....

It is.

When the cumulative credit within an economy is larger by far than it has been previously then the scale of increases in base rates required to achieve a comparable destruction in demand is proportionately smaller.

In other words, a 1% increase on £100 of debt achieves the same demand destruction as a 2% increase on £50 of debt.

Higher bank margins just now amplify this effect, but even when margins inevitably decline, an expanding debt loading within an economy will continue to increase the effectiveness of base rate rises at ever smaller increments.

HAMISH_MCTAVISH

brit1234 wrote: »

Mortgage rates will continue to creep up as QE happens less often and is phased out.

Yes yes yes, and houses will be 50% off by xmas 2009..... We know.

Loughton_Monkey

Generali

The Fed has already announced that rates will rise (aka tapering).

My guess is that will happen around March 2014.

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

.......So if that's what you're counting on, probably best to think again....

I'm counting on rates rising long before that.

Savings rates for cash-rich old pensioners have plummeted to the point of mayhem and so I have organised a demonstration that will result in rates going up fast.

We will assemble at Trafalgar Square and quaff large quantities of gin & tonic, while we prepare all the placards saying "Carnage under Carney", "Carney steals from pensioners", and "Can't save Won't save".

At 2 p.m., a march down Horseguard's Parade will commence, armed with buckets and shovels to collect enough horse manure to shove through the letter box of the DWP, together with demands to treble the heating allowance and give us all Bank Passes enabling us to get 7% interest on all our savings.

A small deputation will deviate to Carney's private house where a volunteer will climb on the roof and defacate down the chimney, and shout down "How's that for a 5% HTB deposit?", while the rest of us descend upon Threadneedle Street and chant outside the BOE. [Word has gone out for ideas on what words rhyme with Banker]. If they do not come out to accept the petition for higher rates, it will be thrown through the window attached to a large Zimmer frame.

This should have rates rising in no time.

Generali

Loughton_Monkey wrote: »

[Word has gone out for ideas on what words rhyme with Banker].

Hey Carney, Central Banker.
Low interest rates?
No thankya.

Something like that...?

wymondham

can't wait for a rate rise ..... show's we're getting back to normal and encourages long term planning in saving again rather than short term spending