Interest rate rise?

System

Masomnia wrote: »

They can also unwind QE to tame inflation now. I can't see significant rate increases until a lot of that is dealt with.

I'm not sure whether it's god news or bad for me. I'll hopefully get a bit more interest on my deposit, and it should in theory put downward pressure on house prices, but then when I do get a mortgage it will be a higher rate in theory.

Swings and roundabouts I suppose.

A lower price paid for a property is locked into your accounts permanently, whereas a higher mortgage rate is likely to be transitory.

Filo25

I haven't seen any indication that interest rate "normalisation" is likely to be as quick or go as far as some would like to see given the ongoing issue of anemic growth in the UK.

For all the Labour market looks tight on headline measures of unemployment it still isn't acting like it is particularly tight with regards to wage growth.

System

Filo25 wrote: »

I haven't seen any indication that interest rate "normalisation" is likely to be as quick or go as far as some would like to see given the ongoing issue of anemic growth in the UK.

For all the Labour market looks tight on headline measures of unemployment it still isn't acting like it is particularly tight with regards to wage growth.

Fortunately, we only have a couple of hours to wait to see if they start normalising. Maybe they will even say what level they currently see as normal (neutral).

lisyloo

Ozymandias73 wrote: »

A lower price paid for a property is locked into your accounts permanently, whereas a higher mortgage rate is likely to be transitory.

True, but you have to be able to get the mortgage in the first place to benefit,

System

lisyloo wrote: »

True, but you have to be able to get the mortgage in the first place to benefit,

If someone is in steady work, I expect they would get a mortgage even if interest rates go up.

Graham_Devon

Really hard to call this time, but I reckon they are looking at anything they can to bottle it and do nothing.

Weaker than expected something may just hold rates where they are, regardless of every other indicator.

The BOE seems to like the use of words as a tool for the economy, rather than any actual action. We shall see, I just remain cautious. Any rise is good news though. We have to get back to some semblance of normalisation at some point.... it's been a decade.

Graham_Devon

On saying what I said above, the BBC seem to have released two blog pieces which talk specifically about the rise today, as if it's already happened.

So maybe they know something the rest of us don't.

System

I have just been reading that the split of votes on the MPC is probably important to watch as a supporting factor for GBP. If the split in favour of a rise is narrow, such as 5:4, GBP could well still fall. The split is expected to be 7:2, which would be considered neutral for GBP.

gevans35

0.75% well, it's a start.

Filo25

This had been trailed as near certain in the press recently so appeared to be pretty much a done deal, unanimous vote though so more hawkish than expected, I doubt we will see another rise this year though unless we start seeing a lot more progress on Brexit negotiations.

Still guiding that old favourite though, that future rises will be at a gradual pace and to a limited extent.