interest rate cuts could be on their way

free4440273

free4440273 wrote: »

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

Plenty of traders have their finger on the Sterling 'Sell' button - and they're itching to use it. Like i've said before: I think a currency crisis will preempt/precipitate a stock market crisis. (I'm shocked this morning: the Hang Seng actually went down last night:rotfl:)

Jonbvn

Merv has stated quite openly that rate cuts will occur quite shortly. The swap rates are also indicating the same.

The outlook for sterling is not good. However, AFAIK UK has the highest IR of any G7 country, so this looks inevitable.

Inflation will obviously rise, but the country will not collapse, as some alarmists would have you believe. The UK has been through this before.

Conclusions:
1. Fix your savings rates where you can.
2. Consider index linked savings.
3. Do not fix your mortgage rate (unless you are at the limit of affordability).

Romani_Ite_Domum

The only way that I can see out of this mess is a future cut in IRs to save the economy WITH tighter control of the banks lending back to historic values and introducing taxation that makes investment in property less viable.

Interest cuts without regulation of the housing market clearly has no long term future. They must realise this by now.

carpetbelly

Romani_Ite_Domum wrote: »

WITH tighter control of the banks lending back to historic values

Not going to happen. Would you like everyone scored how they used to be as well? How about we all book appointments with our bank managers and chat to them about getting a mortgage like the good old days. Unfortunately, times have changed. A lot of people seem to think the same measurements still should apply.

Romani_Ite_Domum wrote: »

and introducing taxation that makes investment in property less viable.

This I totally agree on. I don't like the high prices and especially as I got gazumped on a property by a BTL'er. But that's capatilism for you. The rich keep on getting richer at the expense of the poor.

Romani_Ite_Domum wrote: »

Interest cuts without regulation of the housing market clearly has no long term future. They must realise this by now.

But if people want to sell for x amount and people are willing to pay up to x amount, how will you regulate that? By forcing the banks to only lend up to y amount? Banks are still a business at the end of the day and are still out for themselves.

I don;t disagree with your last statement, I just see no way of being able to implement it. Maybe we should just have a revolution and kick brown out and start again

I agree with Generali on the 3 x 25bps cut by xmas 2008. Next year is going to be a tough interesting time for a lot of people me thinks.

free4440273

A .25/.50 cut on the cards for January: Hello Mr Inflation.

Romani_Ite_Domum

carpetbelly wrote: »

Not going to happen.

Why not? I could go out today and get a mortgage I know I could not afford. This needs to change.

Tighter controls of mortgage applications to prosecute the lenders for "Lie to buy" this would also help.

This is what I mean by regulation of the housing market.

If the theory that the country is actually run by the banks and not by the goverment is true, then you are probably right. Apart from that I can't see its too difficult.

Generali

Romani_Ite_Domum wrote: »

Why not? I could go out today and get a mortgage I know I could not afford. This needs to change.

Tighter controls of mortgage applications to prosecute the lenders for "Lie to buy" this would also help.

This is what I mean by regulation of the housing market.

If the theory that the country is actually run by the banks and not by the goverment is true, then you are probably right. Apart from that I can't see its too difficult.

I'm not sure why it's better that the government decides who borrows than the free market.

You end up (like in the 60s and 70s) with interest rates kept very low for political reasons (then to prop up heavy industries that employ lots of unionised labour - these days most likely to featherbed the finance 'industry') and huge lending restrictions so you can only borrow money if you're a 'decent sort' (women were very unlikely to get a mortgage for example).

Guy_Montag

Generali wrote: »

(women were very unlikely to get a mortgage for example).

Quite right too.

Anyway - the likes of this may lead to a tightening of lending criteria :eek:

An American judge has prevented Deutsche Bank from repossessing 14 homes because the bank could not prove it owned the defaulting mortgages involved. The ruling by Ohio district court judge Christopher Boyko could have serious repercussions for banks and mortgage lenders, for whom the pooling of mortgage securities is a $6,500bn (£3,200bn) industry.

Torygraph article

Romani_Ite_Domum

Generali wrote: »

I'm not sure why it's better that the government decides who borrows than the free market.

You end up (like in the 60s and 70s) with interest rates kept very low for political reasons (then to prop up heavy industries that employ lots of unionised labour - these days most likely to featherbed the finance 'industry') and huge lending restrictions so you can only borrow money if you're a 'decent sort' (women were very unlikely to get a mortgage for example).

Generali, you've got me this time. I am not actually sure if you are being serious with your comment. :rolleyes: are you saying there is no middle ground?

What I am saying is save the debt laden country a lot pain by keeping interest rates relatively low but tighten lending so that the problem does not become exacerbated.

I don't think inflating our way out of this is a good idea.

nollag2006

As a firm fan of discounted trackers, this is great news for me !! Whoppeee !!!

Add into that a nice dollop of wage (and hopefully rental inflation) and we should start to see mortgage payments become a lot less painful for a lorra people !!

Great news all round !!!