BoE raise interest rates by 0.50% to 4%

Aberdeenangarse

As expected.

london21

Likely more increases over the coming months. 

Edi81

london21 said:

Likely more increases over the coming months. 

Not necessarily. The market is pricing in perhaps one more increase this year and then it falling back.
of course, there are a lot of variables but the days of sub 1% are gone. 

mi-key

london21 said:

Likely more increases over the coming months. 

Not really, Andrew Bailey has said today he thinks we are worst the past and inflation seems to be starting to fall.GDP forecast shows much shallower and shorter recession.

OBR are predicting a 9% drop in house prices over the next two years. Lloyds, who are more conservative are predicting 8% fall by the end of 2023

TheJP

From what the BOE Gov has said they think this is the peak. I think we will see fixed rates peak at about 3.5/4 % for the next few years. My house has just been valued for re-mortgage and its gone up by £103k in 2 years, prices aren't falling as expected however i doubt i would get that valuation on the open market.

sevenhills

mi-key said

Not really, Andrew Bailey has said today he thinks we are worst the past and inflation seems to be starting to fall.GDP forecast shows much shallower and shorter recession.

OBR are predicting a 9% drop in house prices over the next two years. Lloyds, who are more conservative are predicting 8% fall by the end of 2023

It was only yesterday that the IMF stated that the UK will be the only economy negative for 2023.
With many workers suffering a 5% real cut in pay, how are we past the worst.
Then there are all these strikes and workers losing pay.
Of course house prices will fall, there is less money in the economy.

penners324

Most organisations go by what the OBR, ONS and BoE state not the IMF. The 3 former organisations have a far better understanding of the UK economy than the IMF

sevenhills

penners324 said:

Most organisations go by what the OBR, ONS and BoE state not the IMF. The 3 former organisations have a far better understanding of the UK economy than the IMF

These organisations have different biases, some like to put a positive spin on their facts, others the opposite.

The Office for Budget Responsibility (OBR) is set to revise its growth forecasts downwards after warning chancellor Jeremy Hunt that it overestimated the prospects for medium-term growth in the economy.

A report in The Times said the OBR told the chancellor in a private submission to the Treasury with the downgrade wiping out all of the government’s £9.2bn headroom in Hunt’s autumn statement and limiting his scope for manoeuvre as he draws up plans for the budget.

In November the OBR forecast that while the economy would shrink by 1.4% this year it would pick up next year, with GDP averaging about 2.6% over the rest of the forecast period.

But The Times understands that the OBR intends to reduce its forecasts by between 0.2% and 0.5% due to weakness in the economy and shortages in the labour market.

TonyTeacake

sevenhills said:

mi-key said

Not really, Andrew Bailey has said today he thinks we are worst the past and inflation seems to be starting to fall.GDP forecast shows much shallower and shorter recession.

OBR are predicting a 9% drop in house prices over the next two years. Lloyds, who are more conservative are predicting 8% fall by the end of 2023

It was only yesterday that the IMF stated that the UK will be the only economy negative for 2023.
With many working suffering a 5% real cut in pay, how are we past the worst.
Then there are all these strikes and workers losing pay.
Of course house prices will fall, there is less money in the economy.

I totally agree the worst is yet to come. Discretionary spending is way down and this is why many businesses are laying off or going bust. Unfortunately there is no soft landing and I'm predicting we are going to have a huge recession. House prices are going to fall massively, way much more  then the OBR or Lloyd's are predicting. I am expecting house prices to drop between 20 to 50% depending on where you live. No way interest rates will be dropping anytime soon and potentially could go much higher over the next 2-3 years as inflation will prove to be very sticky.

london21

Edi81 said:

london21 said:

Likely more increases over the coming months. 

Not necessarily. The market is pricing in perhaps one more increase this year and then it falling back.
of course, there are a lot of variables but the days of sub 1% are gone. 

That will be good. Will go up and once inflation comes down will start decreasing.

Think new normal will be around 3%

RelievedSheff

london21 said:

Edi81 said:

london21 said:

Likely more increases over the coming months. 

Not necessarily. The market is pricing in perhaps one more increase this year and then it falling back.
of course, there are a lot of variables but the days of sub 1% are gone. 

That will be good. Will go up and once inflation comes down will start decreasing.

Think new normal will be around 3%

I don't think the "new normal " BOE rate will be as low as 3%. 

I personally can't see it dropping much below the 4.5% they are now predicting to be the peak. 

I reckon rates will bumble around the 4% mark for a good many years. Which will still be low compared to long term average rates.