Interest rate rise?

lisyloo

Ozymandias73 wrote: »

If individuals and companies cannot feel the increases, the BoE will keep on hiking rates until they do feel them.

What's your thinking behind that.
It's not the BOE's remit to squeeze indivduals/companies.

System

lisyloo wrote: »

What's your thinking behind that.
It's not the BOE's remit to squeeze indivduals/companies.

it is in the BoE's remit to bring about a change in the rate of inflation. That change can only come about by pressure applied to individuals and companies to change their behaviour. If they feel no pressure, or insufficient pressure, they have no reason to change their behaviour, and the BoE will fail to achieve its inflation aims. The BoE will increase the pressure until it is felt sufficiently to change behaviour.

lisyloo

That behavioural change doesn't necessarily mean to go bust in the majority of cases.

Behavioural change could (for example) mean lower payrises or recruitment freeze or any other number of ways to save money.


I don't think it's a big deal if a very small number of the weakess go the wall.
There have been a strring of companies going into adminsitration recently anyway and the world won't be a worse place because we don't have poundworld or toysrus (yes a few individuals may be affected but with very low unemployment they should be able to find alternative employement).

michaels

lisyloo wrote: »

That behavioural change doesn't necessarily mean to go bust in the majority of cases.

Behavioural change could (for example) mean lower payrises or recruitment freeze or any other number of ways to save money.


I don't think it's a big deal if a very small number of the weakess go the wall.
There have been a strring of companies going into adminsitration recently anyway and the world won't be a worse place because we don't have poundworld or toysrus (yes a few individuals may be affected but with very low unemployment they should be able to find alternative employement).

All true but don't apply for a job as a politician (or even central bank governor) if you are happy to describe job losses in those terms....

System

lisyloo wrote: »

That behavioural change doesn't necessarily mean to go bust in the majority of cases.

Behavioural change could (for example) mean lower payrises or recruitment freeze or any other number of ways to save money.


I don't think it's a big deal if a very small number of the weakess go the wall.
There have been a strring of companies going into adminsitration recently anyway and the world won't be a worse place because we don't have poundworld or toysrus (yes a few individuals may be affected but with very low unemployment they should be able to find alternative employement).

Behavioural changes can be any one of millions of changes that result from the financial pressure applied through higher interest rates eg from limiting staff pay rises, to borrowing less, to saving more, to taking the bus instead of driving etc etc. The pressure on the over-indebted may be existential, whereas the less or non-indebted may feel nothing. It all depends how burdened a company or individual is with debt, or how exposed they are to an over-indebted company eg as an employee, supplier or investor.

lisyloo

michaels wrote: »

All true but don't apply for a job as a politician (or even central bank governor) if you are happy to describe job losses in those terms....

Sorry if that didn’t come across right.
I very much appreciate there is a human story behind every job loss.
But if I were to lose mine I’d much rather lose it at a time of low unemployment when my prospects were good rather than in a recession.

Dandytf

1st of 2yr fix complete (mid 25yr term mtg-16 yrs to pay
Anyone want to guess what Nationwides svr will be August 2019 -maybe upto 4.75%
Am I correct it will be from today 3.99%+.25%
-correct me if I'm. Wrong it's almost late evening.

Jack_Johnson_the_acorn

Dandytf wrote: »

1st of 2yr fix complete (mid 25yr term mtg-16 yrs to pay
Anyone want to guess what Nationwides svr will be August 2019 -maybe upto 4.75%
Am I correct it will be from today 3.99%+.25%
-correct me if I'm. Wrong it's almost late evening.

A bank building society doesn't have to act on the BOE base rate rise.

Dandytf

Jack_Johnson_the_acorn wrote: »

A bank building society doesn't have to act on the BOE base rate rise.

I'm predicting todays rate rise will be passed over from mtg providers to their svr customers.

System

Dandytf wrote: »

1st of 2yr fix complete (mid 25yr term mtg-16 yrs to pay
Anyone want to guess what Nationwides svr will be August 2019 -maybe upto 4.75%
Am I correct it will be from today 3.99%+.25%
-correct me if I'm. Wrong it's almost late evening.

According to today's Telegraph, mortgage rates will initially rise more quickly than savings rates, but savings rates should continue to rise over time. Savings rates have been rising nicely for a while, even without today's base rate rise.