Interest rate rise?

System

westernpromise wrote: »

For 9.5 years the property shorts have been gibbering excitedly about how rates are going to start going back up to 15% and it'll be 50% off house prices by Christmas.

I would just get used to the new normal, to be honest - which is rates of < 1% for the foreseeable future, and property shorts gibbering excitedly about how rates are going back up to 15%....

It sounds like you and the property shorts are all taking extreme positions on the spectrum. On the one side, virtually zero interest rates for the rest of your life, and on the other a massive 15%. I myself expect a gradual move back towards normalisation in the medium term, which would mean a base rate of around 3%, give or take. I don't subscribe to the doctrine of the normal never happening again. As Sir John Templeton famously said : The four most expensive words in the English language are "this time it's different."

westernpromise

The property shorts typically think 10 to 12% is normal, because their idea of normal is "before recently". In fact base rates have only been over 10% for 20 of the last 300 years and all were between 1970 and 1995.

I see nothing on the horizon that points to or requires rates above 1%. Assuming we get there in quarter-per-cent increments I reckon we'll see rates at 1% by maybe 2020 but they may well move down again on the way there.

System

westernpromise wrote: »

The property shorts typically think 10 to 12% is normal, because their idea of normal is "before recently". In fact base rates have only been over 10% for 20 of the last 300 years and all were between 1970 and 1995.

I see nothing on the horizon that points to or requires rates above 1%. Assuming we get there in quarter-per-cent increments I reckon we'll see rates at 1% by maybe 2020 but they may well move down again on the way there.

It is your prerogative to take an extreme position away from long term normality with your own money. I am more moderate in my views and positioning, believing in a reversion to mean and Sir John's famous dictum. We are both entitled to take whatever positions we like with our own money.

System

Latest retail sales have come in today as "dismal" according to the FT. So it looks like a rate raise in August is not on the table.

System

The markets are 90% certain that interest rates will go up on Thursday. The mood music in the press seems to be pretty settled on a rise, too.

ess0two

Ozymandias73 wrote: »

SG27 i know the feeling. But sooner or later, there has to be a rise.

Why????????

System

ess0two wrote: »

Why????????

Because as of today, the financial markets are 90% certain the rising cycle will kick off this Thursday.

Herzlos

Ozymandias73 wrote: »

Because as of today, the financial markets are 90% certain the rising cycle will kick off this Thursday.

There has to be a rise because people thìnk there will be a rise?

System

Herzlos wrote: »

There has to be a rise because people thìnk there will be a rise?

If the markets want and expect a rise, they will eventually destroy GBP if they don't get what they want..

gevans35

Fingers crossed there will be but looking at Carney's track record I won't be holding my breath.