Why i think Interest Rates won't go up

Messsiah

I've been reading for a while now, that most people think that interest rates are likely to increase for at least the next 2 budgets, if not more.

This has led to some ppl suggesting that the BTL market is going to suffer, and now is possibly the wrong time to be buying a house.

I disagree..... ( ok you can all point and laugh at me )

However, the reason being, is the recent changes at the Leadership of the Labour party.

With Gordon Brown now taking over, surely he is going to be desperate to ensure that he actually WINS the next election. He is no fool ( especially in monetary terms ), and knows better than most, that lots of voters have gone for BTL, or indeed, other property ventures.

It would be political suicide to anger, upset, or even worse..bankrupt these people.

To have any chance of winning the elections he needs to keep home owners on board, or else he will lose.

The only way he can ensure this, is to keep interest rates as low as possible, for at least the next 3 years or so.

Anyone claiming the the BoE is no longer influenced by politics and that interest rates are now decided by the BoE, is living in a fools paradise.

Interest Rates only go up, to maintain the stregnth of sterling on the international market, however, with talk of Tony Blair possibly taking over as top dog at the World Bank...will that really be an issue anymore ?

I was reading an article in The Independant earlier this month, which claimed that 85% of politicians have more than 1 property, that they own.

Think about it...

~M~

wecanhelpu

Messsiah wrote: »

...... Anyone claiming the the BoE is no longer influenced by politics and that interest rates are now decided by the BoE, is living in a fools paradise....

~M~

And anyone claiming keeping interest rates low is going to prevent this bubble bursting is an ignorant fool.

inmypocketnottheirs

Hi Messiah. Read your signature and I think that both GB and TB could use a decent defence lawyer. The way the good people of this country have been abused and exploited by this comedy double act is criminal.

Messsiah

inmypocketnottheirs wrote: »

Hi Messiah. Read your signature and I think that both GB and TB could use a decent defence lawyer. The way the good people of this country have been abused and exploited by this comedy double act is criminal.

I couldn't agree more :rotfl:

~M~

Dithering_Dad

The BoE's decisions on whether to raise or lower interest rates are primarily based on its inflation targets set by the government. The main method used by government to control inflation is to take money out of the economy by either increasing taxes or by increasing interest rates. We are already taxed to the hilt by this government, so the only way to control inflation is to increase interest rates.

If inflation is not kept under control, then this will affect the wider economy and the UK's financial standing world wide. Do you really believe that the government will risk this to prop up the small minority of UK citizens who are BTL investors?

BTL is like any other investment, the market can go up or down and so "buyer beware". If you are BTL investor then it is up to you personally to ensure that you are financially sound.

Rather than worrying about interest rates, take control and repay some of that capital or sell off a property and use the profit to repay capital on your other properties.

King_Of_Fools

The Bank of England's decision to keep interest rates on hold at 5.5% this month was agreed by a vote of just five to four, minutes have revealed.

http://news.bbc.co.uk/1/hi/business/6221196.stm

"The Bank of England has put the markets on notice to batten down the hatches for a July rate hike," said Dave Brown, chief European economist at Bear Stearns.

"It was not just the close vote - 5-4 - but the fact that King threw his weight behind calls for a hike in June that shrieks out higher rates ahead."

Ad

High house prices are in themselves inflationary. I personally believe interest rates will hit 6% by the end of this year.

I think Julys hike is a done deal. The debt bubble in this country is going to pop and its going to be very messy. The early 90's crash will seem like a blip compared to when this monster goes.

Ad

King_Of_Fools wrote: »

The Bank of England's decision to keep interest rates on hold at 5.5% this month was agreed by a vote of just five to four, minutes have revealed.

http://news.bbc.co.uk/1/hi/business/6221196.stm

"The Bank of England has put the markets on notice to batten down the hatches for a July rate hike," said Dave Brown, chief European economist at Bear Stearns.

"It was not just the close vote - 5-4 - but the fact that King threw his weight behind calls for a hike in June that shrieks out higher rates ahead."

The inflation pressures we are all living with can no longer be ignored. The property market in America is becoming a bloodbath. Some very striking news from our US cousins today.

inmypocketnottheirs

Ad wrote: »

High house prices are in themselves inflationary.

You are of course absolutely right. What would you rather pay, 14% on £70k or 5.5% OF £250k?

Romani_Ite_Domum

Messsiah wrote: »

With Gordon Brown now taking over, surely he is going to be desperate to ensure that he actually WINS the next election.

Glad to see that someone agrees that GB would mess up the future economy just to win the election.

Trouble is that he has already been doing this as chancellor. I think the chickens are coming home to roost.

Ad

Romani_Ite_Domum wrote: »

Glad to see that someone agrees that GB would mess up the future economy just to win the election.

Trouble is that he has already been doing this as chancellor. I think the chickens are coming home to roost.

A nation endebted. I don't think even he has much magic left to manipulate his so called miracle economy.