When Will Rates Rise?

Loughton_Monkey

wymondham wrote: »

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

Trouble with spending is that once rates go up, your money is not there to take advantage!

Rightly or wrongly, I've popped some of mine into "absolute" funds to try and get growth without volatility.

ILW

wymondham wrote: »

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

Governments are not interested in long term. Just until the next election.

harpoboy

brit1234 wrote: »

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

Hi brit

What happened to your lovely signature?

MrRee_2

IR's will not increase until after the Election.

If IR's increase there is no reason at all for savings IR's to increase too ..... we have had 0.5% IR's for many years - but, it's only this year that savings rates have dropped to 1%.

Yes, I know that's because they get cheap money from the Government, in an effort to get lending started.

So, base IR's will creep up from after the next Election. Only if government cheap money tap is turned off will savings rates increase.

I've started spending some of mine ...... it's much more enjoyable!

Kennyboy66

HAMISH_MCTAVISH wrote: »

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

The very definition a 'a little knowledge is a dangerous thing'.

Loughton_Monkey

harpoboy wrote: »

Hi brit

What happened to your lovely signature?

Good point.

He was on First Time Buyer's Strike wasn't he? Be rather amusing if he's come off strike, just at the time he can't afford it anyway!

MrRee_2

First Time Buyers Strike?

Given the explosion in the price of FTB houses that seems a rather stupid thing to have done.

MortgageAnxiety

Hamish - thank you, a superb overview.

HOWEVER... What happens if we go the other way?

I have been reading a lot about the debt ceiling in the US and the prospect of them defaulting. With a default I understand this will have global ramifications and cause an unprecedented rise in interest rates in the US and presumably the UK?

I concede that I do not fully appreciate how this will work or impact on the UK, but from what I have read...

US bonds become higher risk - fewer buyers - rates rise to make more attractive - recession

OR

US bonds are sold off - US buys more (QE) - rates held low - US bankrupts itself.

How would these impact on the UK?

HAMISH_MCTAVISH

MortgageAnxiety wrote: »

I have been reading a lot about the debt ceiling in the US and the prospect of them defaulting.

There is no prospect of a debt default in the USA.

The tea party nutters have been absolutely humiliated in a total defeat, and the Republicans now risk losing 37 seats and control of the lower house in the mid-terms due to an unprecedented swing in the polls.

The public are angry at the pointless, political, partisan, games being played, and overwhelmingly blame the republican party.

MortgageAnxiety

While I don't doubt you know your stuff, can you please explain further?

The US now has so much debt that it cannot possibly pay it back. If they cannot pay it back then 'someone' has to buy that debt. If China, Japan, Europe decide that that is a high risk debt then they won't buy it. If that happens the US either defaults or goes into MASSIVE QE. They will presumably do the latter first, causing inflation and interest rates to be forced up?

I expect the US bills to come onto hard in 2014 and I also expect Hellen to print faster then Bernanke.

What are your thoughts on this?