Ongoing Interest Rate rise speculation (latest)

Tammer

Hi,

Here's a bearish article on interest rate rises suggesting it might be some time before we see one.

It seems like the BOE would like to raise rates, and is warming us up to this, but every month brings news that pours cold water on the prospect for the next couple of months anyway. I wonder if Japan thought they'd see rises when there's plummeted all those years ago, only to be stuck with low rates since.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/products/products-news/deflation-predicted-to-return-as-oil-prices-fall/2023161.article

Thrugelmir

Interest rates are determined by other factors. Not just the BOE setting base rate. The effects of central bank intervention will slowly wear off. Resulting in market forces influencing borrowing rates as well.

masonic

I can't really see this as bad news. As Thrugelmir points out, a 0.25% or 0.5% increase in the base rate is not going to impact the rates offered in high interest current accounts and probably won't have any material impact on other savings accounts.

Those with large debts will of course see this as good news, although perhaps not the part about inflation rising slowly.

Glen_Clark

I think the greatest pearl of wisdom we have had from Mark Carney is that we are 'getting closer to the point when interest rates will rise.' Can't argue with that. Its the kind of wisdom that merits his £700k salary and £3k a week housing allowance. Nice work if you can get it. But we are asked to believe he is independent of Gideon Osborne who put the job his way :rotfl:

Thrugelmir

Glen_Clark wrote: »

I think the greatest pearl of wisdom we have had from Mark Carney is that we are 'getting closer to the point when interest rates will rise.' Can't argue with that. Its the kind of wisdom that merits his £700k salary and £3k a week housing allowance. Nice work if you can get it. But we are asked to believe he is independent of Gideon Osborne who put the job his way :rotfl:

Not that old political chestnut again. Any evidence to support? Or is it supposition based on the poor media coverage given to the topic. As the BOE committee members are all very forthcoming and explain in much detail. If one bothers to listen.

bigadaj

Thrugelmir wrote: »

Not that old political chestnut again. Any evidence to support? Or is it supposition based on the poor media coverage given to the topic. As the BOE committee members are all very forthcoming and explain in much detail. If one bothers to listen.

I'm not quite as cynical as glen, but not far behind.

I thought carneys appointment was good when it was made but why interest rates haven't risen yet, if only marginally, I just can't understand. it's a bloody long emergency if it's now going on for more than six years. In fact longer than our world wars apparently.

The fact they haven't risen just looks wholly political, stock markets have been fairly robust, house prices have carried out rising to bubble levels in London and the south-East etc

Archi_Bald

Thousands of SMEs would go down the swanny if their loans became more expensive; huge numbers of people would get into negative equity; the joy of higher interest rates for the savers would be very shortlived as the next recession would take hold. The UK would be the laughing stock of the entire world for not having noticed that the economy of the entire western world is in a delicate state.

bigadaj

Archi_Bald wrote: »

Thousands of SMEs would go down the swanny if their loans became more expensive; huge numbers of people would get into negative equity; the joy of higher interest rates for the savers would be very shortlived as the next recession would take hold. The UK would be the laughing stock of the entire world for not having noticed that the economy of the entire western world is in a delicate state.

From a 0.25% rise in base rate?

Don't see the economy being that sensitive currently.

Businesses are a consideration but the answer to the negative equity issue is to further promote house price inflation for ever presumably?

Thrugelmir

bigadaj wrote: »

I thought carneys appointment was good when it was made but why interest rates haven't risen yet, if only marginally, I just can't understand. it's a bloody long emergency if it's now going on for more than six years. In fact longer than our world wars apparently.

Shows how close to the edge the whole financial system was. Back in 2008 the UK banking system was 48 hours away from collapse. RBS was effectively nationalised and Lloyds jumped into a shot gun marriage with HBOS on the back of an undisclosed £25 billion loan from the Treasury.

Originally Basle 111 was due to be implemented by 2015. Then 2018 and now 2019. Shrinking the size of banks balance sheets and building higher capital levels is taking far longer than expected.

Events in China last week won't help either.

redux

Glen_Clark wrote: »

I think the greatest pearl of wisdom we have had from Mark Carney is that we are 'getting closer to the point when interest rates will rise.' Can't argue with that. Its the kind of wisdom that merits his £700k salary and £3k a week housing allowance. Nice work if you can get it. But we are asked to believe he is independent of Gideon Osborne who put the job his way :rotfl:

Of course we are. We're also getting closer to the point when interest rates will fall, at exactly the same speed, or any other type of event that will eventually happen in the future, as relentlessly as clocks and calendars turning.

So actually it's a fatuous statement.

Pincher

All I see is good news.

Interest rate staying low is good for my tracker mortgage.

Oil price low is good for my car's fuel bill.
Gas and Electric are on one year fix, but hopefully there will be an even cheaper fix.

Just got a ~£335 return flight to the Far East, including ALL taxes and fees.

Even my Iceberg lettuce from Spain or wherever will be cheaper to transport.