Bank of England raise base rate to 5.75%

lisyloo

Yes I agree with many of the points made.

However don't forget that if others get into difficulty then it could have a knock-on effect into other areas.
A cut back in households could mean that people that work in bars, restaurants and shops could lose their jobs because of the cut backs in household spending.
It could potentially trigger a recession.

Nothing wrong with being happy about, but there are potential consequences.

e.g. you could be happy to read about the rate rises on your savings and then lose your job.

I'm a saver too and work for a global company (so less likely to be affected by a UK recession) however my feelings about the rate rise are not entirely self-centered. I'm not implying that anyone else's opinions are self-centered I'm jsut saying that there are longer term consequences to consider than just the immediate impact on savers (many of whom are worthy pensioners I agree).

Mr_Mumble

Kazza242 wrote: »

I wonder how high rates will go?

The analysts on Bloomberg TV expect this to be the top for UK interest rates, not that I was intently watching the decision live of course . The market is expecting at least one more rise (based on futures contracts) this year. Personally I don't think there'll be another movement in rates until 2008.

Of course, no-one knows for sure and decisions on interest rates will be dependent on economic data. Everyone expects inflation to fall (thanks to last years huge energy price hikes being discounted from the figures). It is just a matter of how far inflation falls, if CPI is consistently below 2.5% in the second-half of the year I don't see another rate rise. If CPI stays around 2.5% with signs of wage inflation then the odds are we will see another rise or two. Just my tuppence.

nilrem_2

Kazza242 wrote: »

I wonder how high rates will go?

That is just one thing that no one can forecast, some 'experts' will say that rates have now peaked or will peak after one more rise but they just do not know what may happen in the future, events in other parts of the world can affect the rate as well as circumstances in the UK.:)

If only Crystal balls really worked!

Jonbvn

amcluesent wrote: »

>So which savings rates will follow suit?<

I set my lending rates on Zopa to 6.8% this morning...

Thanks for reminding me. Will have to reset my rates now!

Kazza242

Here is an interesting article from thisismoney titled: 'Where next for rates?'.

City analysts, industry leaders and lenders give their views on where interest rates will go.

GreenNinja

lisyloo wrote: »

Yes I agree with many of the points made.

However don't forget that if others get into difficulty then it could have a knock-on effect into other areas.
A cut back in households could mean that people that work in bars, restaurants and shops could lose their jobs because of the cut backs in household spending.
It could potentially trigger a recession.

Nothing wrong with being happy about, but there are potential consequences.

e.g. you could be happy to read about the rate rises on your savings and then lose your job.

I'm a saver too and work for a global company (so less likely to be affected by a UK recession) however my feelings about the rate rise are not entirely self-centered. I'm not implying that anyone else's opinions are self-centered I'm jsut saying that there are longer term consequences to consider than just the immediate impact on savers (many of whom are worthy pensioners I agree).

I am really happy for the savers but at the same time not happy for myself. Things are quite tight to be honest, recently divorced, now have all household expenses and mortgage to pay on my own. 4 rises in mortgage since I moved into my house in October and now looking at a fifth. Am now looking at getting a part time job in Sainsburys, one late evening a week and a saturday to make some extra money so I can survive. I have no other debt apart from my mortgage by the way so I am not living irresponsibly.

zag2me

Good and bad news for me, I have a reasonable size mortgage, but also some reasonable savings.

So my finances are nicely balanced whatever happens with rates.

Pobby

I feel sorry for a lot of people with interest rises.However I was paying off a mortgage when they way higher than now.Now I am mortgage free with a fair amount of savings a bit of a better return would be handy.

influence

I have to agree with lisyloo. Our current good economy (these years or probably this year) is based on the growth of company activity. Loans and borrowing is an essential part of business.

While we might enjoy higher and higher interest, I do share the same sentiment on the long term effect. Maybe abit pessimisstic. But looking at the uncertainties around the world (US and Asia), things can simply collapse if they are not handled properly.

Higher interest => our cost (companies) increases => less export (since we charge more) => general economy will fall and worse if the global economy declines.

Also housing is an issue. I am a recent graduate and probably going for first time buyer. Mortgage will certainly a killer especially in London. If the housing market becomes too stagnant for locals, foreigns have loads of money to buy them. It will effectively affect our lives. Pay is stagnant, Mortgage increases +housing price. I doubt saving will keep me going too far even with 6% interest.

It is a dillemma. Shall we get more interest or shall we try to keep our job?

Probably for those who have read some of my past post about buying shares, I am really looking into investing into the economy and seek growth rather than looking for short term income.

No offence but that's how I feel about the interest rise.