Interest Rates going back up to normal levels again?

AG47

westernpromise wrote: »

You keep saying "normal" as though there's some "normal" rate we all agree on. I bet you think "normal" is 10% or so, am I right? If so I have bad news for you - rates have only been above 10% in 20 of the last 300 years and all of them were between 1970 and 1995.

Your idea of normal is probably a level that was an ephemeral aberration in itself.

I'd assume mortgage rates of 3 to 4% for the indefinite future / a standard mortgage term starting from here, if I were you.

Or so is normal for the last few hundred years

This is the same with anything. Interest rates over the last few hundred years have been very different from the last ten

GreatApe

AG47 wrote: »

Or so is normal for the last few hundred years

This is the same with anything. Interest rates over the last few hundred years have been very different from the last ten

It is very hard to compare more than 20 years apart I would say close to zero chance of doing a good job of it its too many variables. Maybe you could even argue its hard to compare more than ten years apart

So the normal now is zero real rates.
The new normal isn't going to be 1990s rates or 1980s rates or 1970s rates much more likely the new normal is going to be even MORE NEGATIVE real rates.

There is no fundamental reason returns on savings have to be positive
Just because it held true in other periods when capital requirements were higher it doesn't mean it has to hold true.

worldtraveller

Unexpectedly weak economic data and cautious remarks from Governor Mark Carney have dashed what looked like near-certain expectations of a rate increase until a few weeks ago.

Since he joined the BoE in 2013, Carney has signalled several times that rates were likely to rise, only for economic data to go the wrong way.

With the prospects for Britains economy unclear and the terms of Britains departure from the European Union far from settled, Carney is likely to want to hedge his bets on Thursday.

The biggest challenge will be to keep the prospect of a further rate rise this year credible in the eyes of investors, who feel wrong-footed by a slowdown in the economy that may well prove temporary and by the BoEs shifting guidance.

Reuters

Some would say that a blindfolded child, pinning the tail on a donkey, would be a better guide on the economy than Mark Carney! :whistle:

sevenhills

worldtraveller wrote: »

Unexpectedly weak economic data and cautious remarks from Governor Mark Carney have dashed what looked like near-certain expectations of a rate increase until a few weeks ago.
Since he joined the BoE in 2013, Carney has signaled several times that rates were likely to rise, only for economic data to go the wrong way.

:whistle:

Perhaps Carney did not want Sterling to keep going up, prior to any rate increase.

GreatApe

worldtraveller wrote: »

Unexpectedly weak economic data and cautious remarks from Governor Mark Carney have dashed what looked like near-certain expectations of a rate increase until a few weeks ago.

Since he joined the BoE in 2013, Carney has signalled several times that rates were likely to rise, only for economic data to go the wrong way.

With the prospects for Britains economy unclear and the terms of Britains departure from the European Union far from settled, Carney is likely to want to hedge his bets on Thursday.

The biggest challenge will be to keep the prospect of a further rate rise this year credible in the eyes of investors, who feel wrong-footed by a slowdown in the economy that may well prove temporary and by the BoEs shifting guidance.

Reuters

Some would say that a blindfolded child, pinning the tail on a donkey, would be a better guide on the economy than Mark Carney! :whistle:

Over the decade inflation has averaged 2.8% spot on for the target of 2-3% so doing nothing and keeping rates at 0.5% in hindsight was clearly the right thing to do

The-Joker

GreatApe wrote: »

Over the decade inflation has averaged 2.8% spot on for the target of 2-3% so doing nothing and keeping rates at 0.5% in hindsight was clearly the right thing to do

You mean the emergency low interest rates can't go back to normal because the emergency from 2008 is not over yet?

What ever happened to all those green shoots we have been promised for the last ten years?

chucknorris

The-Joker wrote: »

You mean the emergency low interest rates can't go back to normal because the emergency from 2008 is not over yet?

What ever happened to all those green shoots we have been promised for the last ten years?

I don't even know how much extra those emergency low interest rates have earned us, but I think that it is around £400k additional gross profit. I would consider that to be a few trees, rather than merely green shoots. Plus we are still counting of course, it doesn't look like a 5% base rate will be in place for quite some time.

HPC_Ghuol_Hunter

Never considered that emergency is the new normal? Of course you didn!!!8217;t you just want to pray on the hard working families hoping that they get made redundant and lose their houses just for you to pick up for peanuts. Not going to happen.

Thrugelmir

The-Joker wrote: »

You mean the emergency low interest rates can't go back to normal because the emergency from 2008 is not over yet?

Always was going to take decades to fix. Yet to experience the after effects of QE and the reining in of all the BOE support schemes. .

chucknorris

Thrugelmir wrote: »

Always was going to take decades to fix. Yet to experience the after effects of QE and the reining in of all the BOE support schemes. .

What sort of fall out do you see as being possible Thrug?