Interest rates cut to 0.25% from 0.5% discussion

bigadaj

lisyloo wrote: »

It made a difference and that's a fact. Sterling dropped and equities went up.

Yes, but in the real world, to businesses and individuals.

You can argue that stockmarket and currencies do have an effect, but is this cut going to make any difference to business investment, bank lending or personal finances (apart from individuals getting even less in interest)?

The printing money element, both additional qe and funding for lending style money for banks, will have impact and effect, so why cut interest rates a negligible amount apart from to grab some headlines in the media? If it was just the former and not the latter then maybe that would be too complicated for people, or more pointedly journalists.

bertpalmer

Back in March I got a tracker mortgage when it was forecast the only way interest rates could go was up. It was a question of when, not if.

Feeing pretty smug right now. Doubt it'll save much but I got lucky for once!

I'm an investor, little savings so otherwise not bothered about growing savings from interest rates.

gadgetmind

bigadaj wrote: »

You can argue that stockmarket and currencies do have an effect, but is this cut going to make any difference to business investment, bank lending or personal finances (apart from individuals getting even less in interest)?

Yes, it will make a big difference across the board, but the other measures announced at the same time are also having a large effect.

Gilts of all durations are now on sub 1.5%. Madness!

gadgetmind

lisyloo wrote: »

Sterling dropped and equities went up.

I haven't run the numbers, but did equities increase in value or just in sterling terms?

bigadaj

gadgetmind wrote: »

Yes, it will make a big difference across the board, but the other measures announced at the same time are also having a large effect.

Gilts of all durations are now on sub 1.5%. Madness!

How's the 0.25% cut going to help practically?

This is the problem with avoiding a depression, or more pointedly believing the economic miracle of the early to mid noughties, there's still debt that should have been written off that hasn't been.

Fantasy economics and accounting which leads to the mess we're currently in.

Chickereeeee

bristolleedsfan wrote: »

[FONT=&quot]We were told that in the event of brexit interest rates would rise sharply, increasing mortgage and debt costs and leading to mass unemployment and huge tax rises.

Now we have a cut in interest rates and it is the fault of people who voted for something which the bank of England said would lead to rate rises?

[/FONT]

1) The BoE is primarily charged with keeping inflation within certain bounds, using interest rates as the main weapon. The drop in the pound has caused imported goods prices to increase by at least 10%. This will eventually fee through as inflation....

2) We have not left EU yet......

C

Aretnap

gadgetmind wrote: »

I haven't run the numbers, but did equities increase in value or just in sterling terms?

FTSE 100 was 6338 on June 23rd (when a remain vote was expected) with an exchange rate of 1.49 - call it 9443 in dollar terms. Now it's 6766 with an exchange rate of 1.31 - 8863. So it's fallen 6% when you price it in dollars.

The FTSE 250, which is more representative of the UK economy, has done even worse. 17333 (25826) to 17407 (22803) - a fall of nearly 12%.

Basically UK equities are only more valuable if you never plan to use your money to go abroad or buy any imported goods. Or indeed, buy anything that's been made with imported goods, or transported with the aid of imported fuel etc. So pretty much anything, really

Deadbeat

I'm thinking I chose the wrong time to pay off my debts and start saving up money.

joe134

I'm Giddy:rotfl:

I remember, and had Miras in 1983.
I had cost of living Bonus nearly every week when inflation was above 20%, stopped by Labour, Callaghan.( I think) as it was a weely pay rise.1974
I got 17% interest from coventry BS in 1993.Inflation above 20%

I've just had my 69th birthday, and had a good secondary modern education, and still learning..
I've worked hard all my life, no mortgage now, and moving money around all the time.
I remember having NOWT, but, now I have money to move around, I know which is better.BUT, maybe not happier:
I had the good times.
I have helped all my Kids/Grandkids get on the housing Ladder.

You wonder why I'm Giddy.:)

EDIT; My old Man had a Motto;
You come into the world with Nowt;
Borrow as much as you can.
Die in debt .
You've made a profit out of life.
I didn't follow his example, I paid for his Funeral.RIP:-) Old Pal.

gadgetmind

Deadbeat wrote: »

I'm thinking I chose the wrong time to pay off my debts and start saving up money.

I don't think you'll wake up many mornings thinking "I wish I had more debt and less in savings."