Interest rate rise?

ThePants999

Now this has been reposted in the right forum, how about we stop posting here, folks? Move along...

System

https://www.bloomberg.com/news/articles/2018-07-15/u-k-economy-gets-vital-healthcheck-before-boe-s-august-decision

Thrugelmir

westernpromise wrote: »

they have the option of cutting their margins.

Banks need to continue to build their capital reserves and buffers. Squeezing profitability would most likely reduce mortgage availability by causing lenders to tighten their criteria.

westernpromise

Not lending at all would squeeze it even worse.

Besides, they've had 10 years of borrowing at 0.5% and lending at 3.5%. They should be recapitalised by now.

System

What about all the zombie companies that are only alive because of QE and virtually zero interest rates? I have read that a lot of zombie companies will not survive higher rates, and will go the way of Carillion. Those companies will employ home owners, who may need to liquidate assets if they lose their jobs.

Crashy_Time

The fallout from Brexit will be equivalent to rates going to about 4%.

System

That sounds like completely made up economics, like saying owning a cat increases a person's lifespan by 5 years, 4 months and 22 days.

buggy_boy

Crashy_Time wrote: »

The fallout from Brexit will be equivalent to rates going to about 4%.

Can we expect this after brexit, 5yrs after brexit, 10yrs after brexit, 15yrs after brexit?

Another crystal ball prediction.....

[Deleted User]

I remember the day well in the 90's when rates went up 3% in a day, to talk about a .25% increase affecting the housing market in any way is a little presumptuous.

System

Debt levels are now miles and miles higher than in the 90s, so you are trying to compare chalk and cheese. Plus, I fear you are ignoring the effect of an interest rate rise on buyer sentiment, which is currently already on the floor in many places.