Bank of England - Low interest rates are 'new normal'

Graham_Devon

troubleonline wrote: »

I know it is bad news for savers but surely it's better to get people out of debt first...

Get out? People are taking on more debt.

chucky

mayonnaise wrote: »

A BoE and a chancellor acting in the best interest of the country's population. Boo!

Too right.

As you can see some on here seem to miss this due to their own selfish and self orientated attitude. If only they would realise they are product of their own environment and are that way due to their own misfortunes.

mayonnaise

chucky wrote: »

Too right.

As you can see some on here seem to miss this due to their own selfish and self orientated attitude. If only they would realise they are product of their own environment and are that way due to their own misfortunes.

Too right.

BoE policy is not meant to serve crashoholics hoping to bag a cheap property on the back of hard working families, nor is it meant to serve those who unwisely choose to 'invest' in risk-free cash deposits.

will456

mayonnaise wrote: »

A BoE and a chancellor acting in the best interest of the country's population. Boo!

I fear your mentally ill if you believe that.

MFW_ASAP

ruggedtoast wrote: »

It is not good news for pensioners.

Depends on their circumstances. Those with nice final salary pensions are probably doing well. Those who have cash savings perhaps should understand the effect inflation has on cash savings and should look at other investment vehicles?

Bantex_2

MFW_ASAP wrote: »

Depends on their circumstances. Those with nice final salary pensions are probably doing well. Those who have cash savings perhaps should understand the effect inflation has on cash savings and should look at other investment vehicles?

Would you recommend that a 70 year old put their savings into medium to long term investments?

Turnbull2000

Bantex wrote: »

Problem is that many are now taking on larger debts BECAUSE of low rates. Look at house prices.

Yes. House prices are currently adjusting upwards to accommodate cheaper borrowing and ultra-low interest rates (will be worth an extra 20% on 2007 values IMO). Raising rates beyond 1% within the next 5-7 years would cause too much distress in the housing market.

Linton

Bantex wrote: »

Would you recommend that a 70 year old put their savings into medium to long term investments?

Some of their lump sum - yes. The average 70 year old could expect to live to around 86 and half will live beyond that. Plenty of time to justify partial exposure to equity. As someone just reaching State Pension Age with some guaranteed income I would only put about 5 years cash requirements into bank savings, the rest would be in equity and bonds.

MFW_ASAP

Bantex wrote: »

Would you recommend that a 70 year old put their savings into medium to long term investments?

Id suggest that they should have already had their retirement savings in medium to long-term investments, before they retired.

A pension is the most tax efficient wrapper for retirement saving and they can then either buy an annuity or put the pension in drawdown, leaving their money invested in a generally cautious mix of income paying gilts, equities and bonds.

ISAs are an alternative, and they would pursue the same investment strategy as a pension in drawdown.

Retirement savings held in cash is a recipe for disaster and erosion in capital by inflation.

pbouk

Nothing to see here!

Did you really think rates would rise before 2015?
What he is saying is, say goodbye to 0.5% at the end of 2014. If you are getting a mortgage rate of say 4% now, and he said BoE rate could be 2% in 3 years time, do you you really think your mortgage will still be 4% in 3 years time?
What I have translated from his words of recent weeks are "I don't have a clue what I am doing, I thought employment wouldn't be 7% until 2016 but I got it wrong, so I have come up with some other rubbish, so I don't look a fool, but I might change my mind in a couple of months and raise rates early or I might change my mind again and lower rates. Basically I don't know what I am doing, but I like the pay;)"