interest rate cuts could be on their way

santashelper_2

heard a report today that there may soon be a cut in interest rates

mr.broderick

santashelper wrote: »

heard a report today that there may soon be a cut in interest rates

Yeah I know.
I'm going to buy a house I think in the next couple of months, going to get
a discounted tracker if there are any going at a decent rate.

SquatNow

(Bangs head on table)

It's rubbish it's just an effort to boost consumer spending because recent figures showed that consumer spending fell off a cliff in october when people should have been getting ready for christmas.

You can't cut rates because the pound would drop in value, which would make everything (since we pretty much IMPORT everything we need, including electricity) much more expensive.

You would get high price INFLATION but because countries like China are undercutting us, we would NOT have high WAGE INFLATION.

The country would collapse almost overnight.

mr.broderick

Why would you care? ?You squat

PROFESSIONAL_LANDLORD

SquatNow wrote: »

(Bangs head on table)



(Dancing on the table)


Jan 2008 will be the first.

ManAtHome

The BoE rate seems to be getting a bit detached from the market - a cut may help northern crock, dunno whether they'll be in a rush to reduce any loan rates other than SVRs linked to BoE rates.

SquatNow

mr.broderick wrote: »

Why would you care? ?You squat

If the costs of electricity, gas, food and petrol started climbing but our wages didn't, we'd all be screwed regardless of whether we own, rent, squat, live with out parents, sleep in the gutter etc.

Ron2256

The BOE can't afford to cut interest rate, not with a barrel of petrol at 95$.
A cut would weaken the pound and petrol would rise sharply.
My local Sainsbury's can't even display the price of petrol at the moment.:rolleyes:
And that's despite £/$ conversion of 2.05.

IveSeenTheLight

Ron2256 wrote: »

The BOE can't afford to cut interest rate, not with a barrel of petrol at 95$.
A cut would weaken the pound and petrol would rise sharply.
My local Sainsbury's can't even display the price of petrol at the moment.:rolleyes:
And that's despite £/$ conversion of 2.05.

From http://www.guardian.co.uk/business/2007/nov/15/economy1

With oil prices close to $100 a barrel and food prices up by 10% in the last three months, he hinted it would be some time before the Bank responded to economic weakness by cutting the cost of borrowing.

So this confirms your thought that interest rates cannot be cut for some time

From http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/11/15/nbanks115.xml

With the British economy struggling to cope with the impact of the credit crunch, rates could be cut as many as three times from the current 5.75 per cent, it indicated.

The first fall could come as soon as next month, experts predicted, after the Bank cut its growth forecasts and warned that a recession was not out of the question.
It signalled that lower borrowing costs were essential if the economy is to remain afloat.

This seems to contradict the thought that Interest rates would be cut.

reading both it would appear that either the interest rates would be cut to sustain the economy and ease the cost of borrowing, althought his may have adverse affects elsewhere

or

Do not reduce the interest rates and the economy will potentially go into recession.

I'm thinking that Mr Brown will want to maintain the economy for another year or so till he gets through another election, then maybe we find a period of tougher times

free4440273

Bizarre. More BofE ineptness. Inflation, by their own admittance, on the increase and they suggest there will be rate cuts. Savers: lock into those fixed rate bonds NOW

Generali

The BoE predict a small rise in inflation followed by a fall which is consistant with the MPC cutting base rates.

I've maintained for a long time that the MPC are going to try to inflate their way out of trouble. My opinion is that they'll try to cut rates leading to a good old fashioned run on sterling. At which point they'll have to rise again. In my new role at Tiny Hedge Fund I have access to research from most of the broker dealers and the concensus seems to be that there'll be 3 cuts of 25bps each before Xmas 2008.

My suspicion is that the most likely outcome from here is a period of stagflation (nil GDP growth or thereabouts (which equates to rising unemployment) and rising prices). The only caveat I put on that is that if consumers panic and start trying to pay down borrowing quickly and en masse then there's a small chance that we end up with deflation and depression.