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Interest rates could rise sharply next year

2

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    purch wrote: »
    GBP will appreciate without any changes in Interest rates, if our economy is growing/recovering faster than our competitors.

    Is GBP appreciating as others are depreciating their currencies? A zero sum game. The Western worlds problems are debt, allied to an aging population with unsustainable level of welfare policies. Something which even the best illusionist isn't going to be able to conceal forever.
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    Thrugelmir wrote: »
    Is GBP appreciating as others are depreciating their currencies? A zero sum game. The Western worlds problems are debt, allied to an aging population with unsustainable level of welfare policies. Something which even the best illusionist isn't going to be able to conceal forever.
    Don't people in other counties age or something? Each country has it's own economic and social issues to overcome.

    Maybe Dynamo can come along and magic something up to back up what you say.
  • moneyinmypocket
    moneyinmypocket Posts: 908 Forumite
    IR will stay low for a long time to come
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    moneyinmypocket wrote: »
    IR will stay low for a long time to come

    Thanks Carney.
  • ffacoffipawb
    ffacoffipawb Posts: 3,593 Forumite
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    If that Milliband gets in next year there will be a run on the pound and interest rates will have to rise sharply.


    Labour Governments are always bad news. Sometimes the news takes a bit longer than usual like the Blair / Brown regime, but it will be a lot quicker this time with that trade union puppet.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ffacoffipawb wrote: »
    If that Milliband gets in next year there will be a run on the pound and interest rates will have to rise sharply.


    The UK collectively has to get its borrowing under control. No poltical party is immune. Foolish to believe that the job is completed. The hardest part is yet to come. The structural deficit that has to be bridged will require difficult decisions to be made.
  • BobQ
    BobQ Posts: 11,181 Forumite
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    ffacoffipawb wrote: »
    If that Milliband gets in next year there will be a run on the pound and interest rates will have to rise sharply.


    Labour Governments are always bad news. Sometimes the news takes a bit longer than usual like the Blair / Brown regime, but it will be a lot quicker this time with that trade union puppet.

    A very intellectual argument.....
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Thrugelmir wrote: »
    The UK collectively has to get its borrowing under control. No poltical party is immune. Foolish to believe that the job is completed. The hardest part is yet to come. The structural deficit that has to be bridged will require difficult decisions to be made.

    what exactly is the structural deficit and why does it need to be 'bridged'?
  • BobQ
    BobQ Posts: 11,181 Forumite
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    CLAPTON wrote: »
    what exactly is the structural deficit and why does it need to be 'bridged'?

    The structural deficit went up in 2007 due to the reduction in the tax revenues in the wake of the GFC. Surely as the economy expands and tax revenues rise we will see it bridged?
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
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    CLAPTON wrote: »
    what exactly is the structural deficit and why does it need to be 'bridged'?

    The structural deficit is that part of the deficit which is not attributable to temporary circumstances such as the loss of tax revenue or increase in benefits spending due to a recession.

    Of course, some on here do not realise that a deficit broadly in line with long term growth rates is acceptable. As it allows borrowing to increase whilst still maintaining the same debt to GDP ratio.

    So a structural deficit of 3% of GDP would be fine in more normal times, assuming also growth rates of 3%, although less than that is required for a number of years now in order for the Debt/GDP ratio to reduce to more prudent levels.
    “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.

    Belief in myths allows the comfort of opinion without the discomfort of thought.”
    -- President John F. Kennedy”
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