Interest rates cut to 0.25% from 0.5% discussion

doe808

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.[/FONT]

[FONT=&quot]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]

It was inflation that was predicted to rise. Interest rates were predicted to fall- at least that what I read in the FT (don't know what the tabloids and others were saying)

gadgetmind

I just told daughter that her mortgage interest was about to go down by £20 pcm. She thought I meant down *to* £20 !

(Mortgage is actually on our property with a Promissory Note in place with her so that it feels like a mortgage from her POV.)

gadgetmind

doe808 wrote: »

It was inflation that was predicted to rise.)

Because of the drop in the value of sterling (predictable and predicted) inflation is now expected to go above 2% target.

This whole article is worth a read.

http://www.bbc.co.uk/news/business-36976528

bottleandahalf

gadgetmind wrote: »

[FONT=&quot]By who?

[FONT=&quot]I think you'll find this site hasn't been updated[FONT=&quot] so perhaps you can find this pre[FONT=&quot]diction on there. [/FONT][/FONT]

[FONT=&quot]http://www.strongerin.co.uk/[/FONT]
[/FONT][/FONT]


Predictions of rate rises were being pushed back long before the referendum.

http://www.telegraph.co.uk/personal-banking/savings/latest-interest-rates-predictions-first-rise-in-august-2019/

And then the day after the vote, interest rate cuts were predicted.

http://www.bbc.co.uk/news/business-36621554

http://www.moneywise.co.uk/news/2016-06-24/cut-interest-rates-predicted-post-brexit

????
"Before the vote the Treasury predicted a vote for Brexit would mean a rise of between 0.7% and 1.1% in borrowing costs (on top of what happens anyway), with the prime minister claiming the average cost of a mortgage could increase by up to £1,000 a year."

http://www.bbc.com/news/business-36537906

Brexit poses a “significant downside risk” and could see interest rates “rise sharply”, Christine Lagarde said as the global finance body published its regular report on UK economic prospects.

http://www.irishexaminer.com/world/imf-chief-interest-rates-could-rise-sharply-after-brexit-399548.html

bristolleedsfan

gadgetmind wrote: »

[FONT=&quot]By who?

[/FONT]

https://www.theguardian.com/business/2016/apr/15/george-osborne-says-brexit-will-drive-up-interest-rates

gadgetmind

bottleandahalf wrote: »

http://www.bbc.com/news/business-36537906

And from the same article -

"But amid fears that the vote for Brexit heralds a period of low growth, some economists are suggesting the Bank of England will cut interest rates. In which case, the cost of lending could actually fall. David Tinsley, UK economist at UBS, said he expects two rate cuts from the Bank of England over the next six months, taking interest rates from a current record low of 0.5% to zero."


Of course, when inflation starts to bite, we may still see interest rates having to rise, so never say never.

gadgetmind

But out of interest (ha!) what predictions regards interest rates did Leave make?

digannio

I'd already long given up the ridiculous chase for ever diminishing returns on cash Isas and the like. I sit back and let the likes of Artemis Monthly Distribution provide me with a monthly income and don't take too much notice of the weekly/monthly movements in the markets and the profits of doom. It might have injected more risk into the equation but overall it's been a lot less stressful than the annual scramble for next to nowt... and more profitable.

buglawton

There should have been an emergency post-Brexit stimulus budget the minute May came in. Some real cuts in VAT and Stamp Duty just for starters.

Stupidly, the chancellor decided not to bother.

Hence the BOE has had to respond with a one-dimensional tool, interest rate cut. Which only benefits the mortgaged and indebted!!

doe808

buglawton wrote: »

There should have been an emergency post-Brexit stimulus budget the minute May came in. Some real cuts in VAT and Stamp Duty just for starters.

Stupidly, the chancellor decided not to bother.

Hence the BOE has had to respond with a one-dimensional tool, interest rate cut.

Agreed, but remember, the Conservative brexit group said they would have voted against an emergency budget. The outgoing chancellor wanted to- but he had no chance of getting it through.

Everyone could see it was required.