BoE view on future rates

marsman802

Useful article here on the BBC in reference to future rate rises.

http://www.bbc.co.uk/news/business-28053045

If Mark Carney believes 2.5% is the new 5% then that is going to be very very good news.

And it also looks like that is some way off by mentioning 2017.

caprikid1

"that is going to be very very good news."

Being a sensible borrower and a serious saver I have to disagree. Lending stupidity has robbed a generation if now several generations.

ChopperST

The majority of this country are borrowers capridkid hence it is very good news for most of us and benefits the economy as a whole as people have more to spend.

Low interest rates have limited returns from cash savings, however cash should never be your sole investment vehicle unless you are saving for the short term e.g. house purchase and those people I genuinely feel sorry for, however HTB address this to some extent whatever its right and wrongs.

Since the financial crisis the FTSE all share has risen from 2100 to 3600
P2P lending has expanded which if invested in for the medium term beats inflation.
Current accounts have begun to offer inflation beating returns particularly for non / low rate tax-payers (Lloyds, TSB, Nationwide etc.)

This article from Motley Fool illustrates the points quite well.

http://www.fool.co.uk/investing-basics/how-when-and-where-to-invest/

TrickyDicky101

ChopperST wrote: »

The majority of this country are borrowers capridkid hence it is very good news for most of us and benefits the economy as a whole as people have more to spend.

I would have thought the majority of the country has to be savers seeing as loan balances tend to be larger than savings balances?

brit1234

ChopperST wrote: »

The majority of this country are borrowers capridkid hence it is very good news for most of us and benefits the economy as a whole as people have more to spend.

Your find there are far more savers and this is horrendous news. For years savers are being robbed to bail out those borrowers who were reckless.

My savings which are being stolen are from my house deposit. How can we return to a stable economy if savings are being destroyed and banks instead rely on funny money printed through QE.

Mark Carney is a dangerous fool brought in to keep the bubble going till the next election. The huge issue in our economy is debt, encouraging people to borrow more is dangerous.

Thrugelmir

marsman802 wrote: »

If Mark Carney believes 2.5% is the new 5% then that is going to be very very good news.

Doesn't mean that 2.5% will remain indefinately. I would say that this is merely a wake up call to knock people out of their slumber.

Estimates suggest that some 200,000 interest only mortgages will mature in 2020 with an average shortfall of £50k. There's plenty of hurdles yet to be overcome.

marsman802

I don't expect 2.5% for the rest of my life and to be honest my personal situation is very good as we only borrow half of what we could. I would hope that as long as the affordability calculations are still being developed that new borrowing is steady.
It's the existing borrowing that is the real issue - some horrible situations to be in for some I feel.

Just need to strike now whilst rates are low. I'm 30 with my first child on the way - I just need to find a situation that will allow them to get a good start and I fully expect to buy their first home if I'm honest as it's going to be a tough journey in years to come.

It's interesting that everyone is upset with the savings rates. I've grown up thinking the only way to ever make money is equities and I still think so.

Good debate to read here by you all

Thrugelmir

marsman802 wrote: »

I would hope that as long as the affordability calculations are still being developed that new borrowing is steady.

No return to lax lending.

FCA are now responsible for unsecured credit as well. So expect MMR style rules regarding loans, credit cards and overdraft in due course. Landscape has changed entirely.

Dan:_4

brit1234 wrote: »

Your find there are far more savers and this is horrendous news. For years savers are being robbed to bail out those borrowers who were reckless.

My savings which are being stolen are from my house deposit. How can we return to a stable economy if savings are being destroyed and banks instead rely on funny money printed through QE.

Mark Carney is a dangerous fool brought in to keep the bubble going till the next election. The huge issue in our economy is debt, encouraging people to borrow more is dangerous.

Really brit? You were saying 'keep the bubble going till the next general election' 4 years ago! How many general elections have we got to go through?

mrginge

ChopperST wrote: »

The majority of this country are borrowers capridkid hence it is very good news for most of us and benefits the economy as a whole as people have more to spend.

You are wrong.

Thrugelmir

ChopperST wrote: »

The majority of this country are borrowers capridkid hence it is very good news for most of us and benefits the economy as a whole as people have more to spend.

Ratio is around 7:1 net savers.

Consumer spending predominantly is spent on imports which generates very little long term benefit to he UK economy. Focus has to switch to long term investment in activities that create jobs and therefore correspondingly wealth.