Will UK interest rates rise next week?

Exodi

callum9999 said:

Sebo027 said:

I don't typically attempt to time the market, but happen to have some spare cash lying around and I'm going to wait and see if there's another dip in the market after the rate rise is announced. It's happened every quarter this year, ref below. 6000 on SWDA and I'll pull the trigger. 

I'm no investment expert, but do the "quarterly dips" coincide with quarterly dividend payments?

When funds pay out dividends they lose value, for obvious reasons.

As masonic says, it's an accumulating fund.

I think we're overthinking it. The dip in late Jan-Feb was almost certainly caused by Russian escalation and subsequent Ukranian invasion, the dip in Jun-Jul coincides with the aftermath of record inflation (and reactionary interest rate hikes) in the US and Europe as sanctions began impacting domestic energy costs.

masonic

Collyflower1 said:

Krakkkers said:

Trying to figure out if we will see a 4% fixed rate savings deal this year.

Oxbury Bank's 5 year fixed rate bond at 3.7% allows you to compound the interest through to maturity. If you did that it would earn interest of c. 3.984% per year! You have to leave it for five years though!

You'd have to be brave. Virtually every prediction of where inflation and interest rates will max out has undershot. I'm a bit confused as to how you've got from the stated 3.70% AER to a figure of 3.984% per year. What does that represent exactly? Edit: looks like it is 1/5 * total return expressed relative to the principal, rather than an annualised return.

Krakkkers

But then you pay all the tax on the interest in the year it matures?

masonic

Krakkkers said:

But then you pay all the tax on the interest in the year it matures?

Not necessarily. Most providers will declare the interest in the tax year it is added to the account (an option to have it paid away may be sufficient for them to take this position). Best to check in advance.

Brie

RobM99 said:

My guess - B of E rate up 0.5% - savers' rates up 0.1%

wouldn't that be nice!!  last time the rates went up I was advised by the bank that the rates they charge were going up by .75% but the rates they pay were sticking to whatever they were a year back.  Obviously they need the money more than we do.

InvesterJones

Brie said:

RobM99 said:

My guess - B of E rate up 0.5% - savers' rates up 0.1%

wouldn't that be nice!!  last time the rates went up I was advised by the bank that the rates they charge were going up by .75% but the rates they pay were sticking to whatever they were a year back.  Obviously they need the money more than we do.

Well they have to find money for extra bonuses once they're uncapped

Expotter

From The Guardian this morning:

"City braces for UK interest rate hike on Thursday

UK government bond yields have jumped this morning as the City braces for a sharp rise in interest rates on Thursday, and further hikes before the end of the year.

The money markets are indicating there is a 75% chance that the Bank of England increases Bank rate to 2.5% this week, up from 1.75% at present."

"The markets are also predicting that rates could reach 3.75% by the end of the year. That implies we could see a second 75bp hike in December, as well as a 50bp rise at the Bank’s meeting in November.

This has pushed up the yield, or interest rate, on five-year UK gilts to 3.24% this morning. That’s its highest level since late 2008, before the financial crisis caused a global recession"

Next question is, how much of this increase is likely to be passed onto savers?

t1redmonkey

Seems to be a lot of split opinions on if it'll be a 0.5% or 0.75% rise.  I'm hoping they go for 0.75% so we don't become too far detached from the US interest rates and have the pound devalued even further if they only go for 0.5%...

2010

Whatever they increase, saving rates won`t go up the same amount.

sevenhills

Most are saying it will be .75 but with the USA putting theirs up this week, if they increase theirs by 1.0 then we may do the same.