80 months of 0.5%

wymondham

With rates now being the same for 80 months is this now the new norm?? There will be lots of people who won't be able to recall when rates used to be variable!

chucknorris

wymondham wrote: »

With rates now being the same for 80 months is this now the new norm?? There will be lots of people who won't be able to recall when rates used to be variable!

My perception looking forward at the next decade, is that a normal base rate will be about 3.5 to 4%, but I am very much aware that circumstances can change and make fools of us. A decade ago it would have been laughable to think about a 0.5% base rate, probably just as crazy as a 12% base rate sounds now.

Thrugelmir

Does make one wonder what's going to happen next. Perhaps it'll be Asia that suffers a banking crisis.

Generali

Thrugelmir wrote: »

Does make one wonder what's going to happen next. Perhaps it'll be Asia that suffers a banking crisis.

An insurance crisis is my guess (if there is going to be a crisis at all).

Thrugelmir

Generali wrote: »

An insurance crisis is my guess (if there is going to be a crisis at all).

Hear that bad debts are rife due to lax and poor lending, particularly in China. Story sounds familiar some how.

kinger101

I guess it's nothing compared to Japan, where interest rates have been below 1% two decades now.

Mistermeaner

I see years of stagnation ahead, minor volatility in markets and interest rates but fundamentally little or no growth, but no recession either. Just lots of mehhhh.

Public sector spending will drop, people won't have as much to spend and we'll realise the boom years are long gone. People will work much much longer for a smaller piece of the pie and everything will be so so.

It's all a bit boring but all a bit bleak too.

I'm going to make my money then move somewhere it's worth more before the developing world catches up.

BarleyGB

Stagnation, looking at our local shopping centre (which was rammed last weekend) you'd be forgiven for thinking people had never had it so good.

Most things we buy we don't need, the stuff we do need is cheaper than ever, everyone seems to have cash left for luxuries, from Latte's to new TVs to new cars which are selling quicker than ever before.

Before anyone says it, it's not all bought on debt at consumer debt is falling (albeit slowly)

Sapphire

Thrugelmir wrote: »

Does make one wonder what's going to happen next. Perhaps it'll be Asia that suffers a banking crisis.

Seriously: what if there is a big war involving Europe?

westernpromise

wymondham wrote: »

With rates now being the same for 80 months is this now the new norm?? There will be lots of people who won't be able to recall when rates used to be variable!

Soon we will be at the point where if you fix for 10 years your entire mortgage term will be based on emergency rates.

Memories are short. There are a lot of people who think 10% is a normal base rate but in fact the base rate has only been that high in 20 of the last 300 years. It's just that all 20 were between 1970 and 1995; so for a whole generation, outrageously high feels normal.

I reckon this is the new normal and we'll be below 1% for another 10 years.

mwpt

BarleyGB wrote: »

Stagnation, looking at our local shopping centre (which was rammed last weekend) you'd be forgiven for thinking people had never had it so good.

Most things we buy we don't need, the stuff we do need is cheaper than ever, everyone seems to have cash left for luxuries, from Latte's to new TVs to new cars which are selling quicker than ever before.

Before anyone says it, it's not all bought on debt at consumer debt is falling (albeit slowly)

I'm not sure where you live but around here (London) most things we *need* are getting pricier

- I need a roof over my head. Buying has never been as unaffordable in London in most people's memories (despite what older people say).

- I need to commute to work. We've had greater than inflation increases every year since I've lived in the UK (more than 10 years). From an already stupidly high cost base compared to the rest of EU.

- I need to keep myself warm. The traditional method of doing so using gas/elec has previously been rising by over general inflation but granted, more recently (two years), has not.

- I need to eat. Food costs were previously at something like 5% inflation but more recently (last few years) have steadied.

- Water bills are about the only thing that I haven't had much cause to think on in my time here.