Are we expecting BOE to remain at 4.75% on 8th February 2025?

Hoenir

"Today's UK employment data showed continuing weakening in a tight market with wages still c.3% over the CPI target."

The annual increase in the minimum wage ripples through to the levels above. To maintain the status quo. Only until time passes will the data show if the impact is inflationary. Meanwhile higher interest rates. in particular affecting those with mortgages, provides a counter balance of suppressing demand. Be no change by the BOE prior to the election result. They'll wish to remain neutral.  I'd say August / September for a 0.25% base rate cut. 

RelievedSheff

Definitely no rate cut this month. 

I don't think there will be one at the next meeting either.

ReadySteadyPop

Hoenir said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

sevenhills said:

fergie_ said:

The mortgage market lags slightly behind the swap markets. Swaps had been coming down - hence some small cuts - and are now creeping back up.

But what should the interest rates be, to benefit the whole economy? Savers need a little interest and businesses need lowish rates.

7% base rate is the historical average I believe?

Pick whatever data you want to get whatever result you want.  You could get anywhere from 2% to 15% as the "historical average".

Can you show me how you get 15% as the average?

By defining "historical" to be 1979 - 1982.  That is a period in history, so it is a historical average.  Not a good one, but then any selected period is arbitrary. 

There is no such thing as "the historical average".

Economists tend to use meaningful chunks of time, 25 years for example, because that is the term of an average mortgage (well used to be) or even longer, I think the 7% figure is a 300 year average maybe, that would be classed as "historical" surely? You seem to be trying to say that interest rates don`t matter much when it is obvious they do matter a great deal to a great number of people, what happens if the four or five years of 15% happens right after your fix on a big mortgage taken at a much lower rate ends?

They don't directly matter that much to any individual, and any selected trend or average is even less useful.

Planning on timing the market, either in terms of interest rate or value, is a fool's errand.

So you don`t think people care about the cost to service their debt, or do you mean something else? What I mean is that the historical averages are a good guide to where rates tend to go without intervention (only massive intervention by central banks allowed the last few years of rates to happen)

Base rate is a macro-level concern that should be approached as one of many contributory levers to the whole economy.  As an individual, what the base rate was in 1952, 2002, or last Thursday means almost nothing.  Neither, realistically, does any trend in that rate.  If you take an effectively fixed-interest deal, which most do (not just in terms of mortgage, but all debt), the only thing that really matters is what the retail rate is at the point when the deal ends.  Whether it goes up, down or sideways in between is completely irrelevant.  People who think it is an important metric are those who chase the market and end up getting burned.

Which random historical average - which actually refer to different rates at different points in the past - do you think is the magic one that things will always happily sit at?  Don't you think that there are other things that might also feed into the 'best' rate which can change over time?

Or is your perspective that fundamentally the economy now is the same as it was in 1750 and it will be exactly the same in 2250, so actually the rate is pointless - in which case why do any trends in it matter then?

No, my perspective is that there is a one off near zero rate (that lasted a long time) due to massive central bank intervention, and a more normal "trend" that we can see from historical data, the smart mortgage borrower will look at the trend not the abnormal period.

Ignore the near zero and the normal trend over the last 40 years is downwards.

More recently the trend has been upwards. The great bond bull market is over. 

Yes, a very fast and noticeable upwards.

A sudden correction of Base Rates. Has a long way to go yet to filter out into the real economy. Even if Base Rate falls slightly there's still upward pressure on borrowing costs as a whole. 

What effect do you think the political changes in the EU will have?

None at all. The international money markets wield huge power and influence. Greater than democratically elected Government. 

They respond to the results of elections though, they don`t operate in a void of their own. My take is that there will be more upward pressure on rates and generally more volatility going forward.

MeteredOut

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

sevenhills said:

fergie_ said:

The mortgage market lags slightly behind the swap markets. Swaps had been coming down - hence some small cuts - and are now creeping back up.

But what should the interest rates be, to benefit the whole economy? Savers need a little interest and businesses need lowish rates.

7% base rate is the historical average I believe?

Pick whatever data you want to get whatever result you want.  You could get anywhere from 2% to 15% as the "historical average".

Can you show me how you get 15% as the average?

By defining "historical" to be 1979 - 1982.  That is a period in history, so it is a historical average.  Not a good one, but then any selected period is arbitrary. 

There is no such thing as "the historical average".

Economists tend to use meaningful chunks of time, 25 years for example, because that is the term of an average mortgage (well used to be) or even longer, I think the 7% figure is a 300 year average maybe, that would be classed as "historical" surely? You seem to be trying to say that interest rates don`t matter much when it is obvious they do matter a great deal to a great number of people, what happens if the four or five years of 15% happens right after your fix on a big mortgage taken at a much lower rate ends?

They don't directly matter that much to any individual, and any selected trend or average is even less useful.

Planning on timing the market, either in terms of interest rate or value, is a fool's errand.

So you don`t think people care about the cost to service their debt, or do you mean something else? What I mean is that the historical averages are a good guide to where rates tend to go without intervention (only massive intervention by central banks allowed the last few years of rates to happen)

Base rate is a macro-level concern that should be approached as one of many contributory levers to the whole economy.  As an individual, what the base rate was in 1952, 2002, or last Thursday means almost nothing.  Neither, realistically, does any trend in that rate.  If you take an effectively fixed-interest deal, which most do (not just in terms of mortgage, but all debt), the only thing that really matters is what the retail rate is at the point when the deal ends.  Whether it goes up, down or sideways in between is completely irrelevant.  People who think it is an important metric are those who chase the market and end up getting burned.

Which random historical average - which actually refer to different rates at different points in the past - do you think is the magic one that things will always happily sit at?  Don't you think that there are other things that might also feed into the 'best' rate which can change over time?

Or is your perspective that fundamentally the economy now is the same as it was in 1750 and it will be exactly the same in 2250, so actually the rate is pointless - in which case why do any trends in it matter then?

No, my perspective is that there is a one off near zero rate (that lasted a long time) due to massive central bank intervention, and a more normal "trend" that we can see from historical data, the smart mortgage borrower will look at the trend not the abnormal period.

Ignore the near zero and the normal trend over the last 40 years is downwards.

More recently the trend has been upwards. The great bond bull market is over. 

Yes, a very fast and noticeable upwards.

A sudden correction of Base Rates. Has a long way to go yet to filter out into the real economy. Even if Base Rate falls slightly there's still upward pressure on borrowing costs as a whole. 

What effect do you think the political changes in the EU will have?

None at all. The international money markets wield huge power and influence. Greater than democratically elected Government. 

They respond to the results of elections though, they don`t operate in a void of their own. My take is that there will be more upward pressure on rates and generally more volatility going forward.

I love the "if i keep saying the same thing, I might be right eventually" approach.

ReadySteadyPop

MeteredOut said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

sevenhills said:

fergie_ said:

The mortgage market lags slightly behind the swap markets. Swaps had been coming down - hence some small cuts - and are now creeping back up.

But what should the interest rates be, to benefit the whole economy? Savers need a little interest and businesses need lowish rates.

7% base rate is the historical average I believe?

Pick whatever data you want to get whatever result you want.  You could get anywhere from 2% to 15% as the "historical average".

Can you show me how you get 15% as the average?

By defining "historical" to be 1979 - 1982.  That is a period in history, so it is a historical average.  Not a good one, but then any selected period is arbitrary. 

There is no such thing as "the historical average".

Economists tend to use meaningful chunks of time, 25 years for example, because that is the term of an average mortgage (well used to be) or even longer, I think the 7% figure is a 300 year average maybe, that would be classed as "historical" surely? You seem to be trying to say that interest rates don`t matter much when it is obvious they do matter a great deal to a great number of people, what happens if the four or five years of 15% happens right after your fix on a big mortgage taken at a much lower rate ends?

They don't directly matter that much to any individual, and any selected trend or average is even less useful.

Planning on timing the market, either in terms of interest rate or value, is a fool's errand.

So you don`t think people care about the cost to service their debt, or do you mean something else? What I mean is that the historical averages are a good guide to where rates tend to go without intervention (only massive intervention by central banks allowed the last few years of rates to happen)

Base rate is a macro-level concern that should be approached as one of many contributory levers to the whole economy.  As an individual, what the base rate was in 1952, 2002, or last Thursday means almost nothing.  Neither, realistically, does any trend in that rate.  If you take an effectively fixed-interest deal, which most do (not just in terms of mortgage, but all debt), the only thing that really matters is what the retail rate is at the point when the deal ends.  Whether it goes up, down or sideways in between is completely irrelevant.  People who think it is an important metric are those who chase the market and end up getting burned.

Which random historical average - which actually refer to different rates at different points in the past - do you think is the magic one that things will always happily sit at?  Don't you think that there are other things that might also feed into the 'best' rate which can change over time?

Or is your perspective that fundamentally the economy now is the same as it was in 1750 and it will be exactly the same in 2250, so actually the rate is pointless - in which case why do any trends in it matter then?

No, my perspective is that there is a one off near zero rate (that lasted a long time) due to massive central bank intervention, and a more normal "trend" that we can see from historical data, the smart mortgage borrower will look at the trend not the abnormal period.

Ignore the near zero and the normal trend over the last 40 years is downwards.

More recently the trend has been upwards. The great bond bull market is over. 

Yes, a very fast and noticeable upwards.

A sudden correction of Base Rates. Has a long way to go yet to filter out into the real economy. Even if Base Rate falls slightly there's still upward pressure on borrowing costs as a whole. 

What effect do you think the political changes in the EU will have?

None at all. The international money markets wield huge power and influence. Greater than democratically elected Government. 

They respond to the results of elections though, they don`t operate in a void of their own. My take is that there will be more upward pressure on rates and generally more volatility going forward.

I love the "if i keep saying the same thing, I might be right eventually" approach.

https://www.express.co.uk/finance/personalfinance/1910828/mortgage-barclays-tsb-interest-rates

MobileSaver

ReadySteadyPop said:

MeteredOut said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

sevenhills said:

fergie_ said:

The mortgage market lags slightly behind the swap markets. Swaps had been coming down - hence some small cuts - and are now creeping back up.

But what should the interest rates be, to benefit the whole economy? Savers need a little interest and businesses need lowish rates.

7% base rate is the historical average I believe?

Pick whatever data you want to get whatever result you want.  You could get anywhere from 2% to 15% as the "historical average".

Can you show me how you get 15% as the average?

By defining "historical" to be 1979 - 1982.  That is a period in history, so it is a historical average.  Not a good one, but then any selected period is arbitrary. 

There is no such thing as "the historical average".

Economists tend to use meaningful chunks of time, 25 years for example, because that is the term of an average mortgage (well used to be) or even longer, I think the 7% figure is a 300 year average maybe, that would be classed as "historical" surely? You seem to be trying to say that interest rates don`t matter much when it is obvious they do matter a great deal to a great number of people, what happens if the four or five years of 15% happens right after your fix on a big mortgage taken at a much lower rate ends?

They don't directly matter that much to any individual, and any selected trend or average is even less useful.

Planning on timing the market, either in terms of interest rate or value, is a fool's errand.

So you don`t think people care about the cost to service their debt, or do you mean something else? What I mean is that the historical averages are a good guide to where rates tend to go without intervention (only massive intervention by central banks allowed the last few years of rates to happen)

Base rate is a macro-level concern that should be approached as one of many contributory levers to the whole economy.  As an individual, what the base rate was in 1952, 2002, or last Thursday means almost nothing.  Neither, realistically, does any trend in that rate.  If you take an effectively fixed-interest deal, which most do (not just in terms of mortgage, but all debt), the only thing that really matters is what the retail rate is at the point when the deal ends.  Whether it goes up, down or sideways in between is completely irrelevant.  People who think it is an important metric are those who chase the market and end up getting burned.

Which random historical average - which actually refer to different rates at different points in the past - do you think is the magic one that things will always happily sit at?  Don't you think that there are other things that might also feed into the 'best' rate which can change over time?

Or is your perspective that fundamentally the economy now is the same as it was in 1750 and it will be exactly the same in 2250, so actually the rate is pointless - in which case why do any trends in it matter then?

No, my perspective is that there is a one off near zero rate (that lasted a long time) due to massive central bank intervention, and a more normal "trend" that we can see from historical data, the smart mortgage borrower will look at the trend not the abnormal period.

Ignore the near zero and the normal trend over the last 40 years is downwards.

More recently the trend has been upwards. The great bond bull market is over. 

Yes, a very fast and noticeable upwards.

A sudden correction of Base Rates. Has a long way to go yet to filter out into the real economy. Even if Base Rate falls slightly there's still upward pressure on borrowing costs as a whole. 

What effect do you think the political changes in the EU will have?

None at all. The international money markets wield huge power and influence. Greater than democratically elected Government. 

They respond to the results of elections though, they don`t operate in a void of their own. My take is that there will be more upward pressure on rates and generally more volatility going forward.

I love the "if i keep saying the same thing, I might be right eventually" approach.

https://www.express.co.uk/finance/personalfinance/1910828/mortgage-barclays-tsb-interest-rates

Seems to say the opposite of what you were suggesting?

buyers who wait to agree a new mortgage deal might see reductions later in the summer

Quite a positive article, certainly not the doom and gloom you keep predicting.

There is also an element of lenders managing levels of new business through these adjustments as some are struggling with demand for their products and managing to service the level of applications

ReadySteadyPop

MobileSaver said:

ReadySteadyPop said:

MeteredOut said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

sevenhills said:

fergie_ said:

The mortgage market lags slightly behind the swap markets. Swaps had been coming down - hence some small cuts - and are now creeping back up.

But what should the interest rates be, to benefit the whole economy? Savers need a little interest and businesses need lowish rates.

7% base rate is the historical average I believe?

Pick whatever data you want to get whatever result you want.  You could get anywhere from 2% to 15% as the "historical average".

Can you show me how you get 15% as the average?

By defining "historical" to be 1979 - 1982.  That is a period in history, so it is a historical average.  Not a good one, but then any selected period is arbitrary. 

There is no such thing as "the historical average".

Economists tend to use meaningful chunks of time, 25 years for example, because that is the term of an average mortgage (well used to be) or even longer, I think the 7% figure is a 300 year average maybe, that would be classed as "historical" surely? You seem to be trying to say that interest rates don`t matter much when it is obvious they do matter a great deal to a great number of people, what happens if the four or five years of 15% happens right after your fix on a big mortgage taken at a much lower rate ends?

They don't directly matter that much to any individual, and any selected trend or average is even less useful.

Planning on timing the market, either in terms of interest rate or value, is a fool's errand.

So you don`t think people care about the cost to service their debt, or do you mean something else? What I mean is that the historical averages are a good guide to where rates tend to go without intervention (only massive intervention by central banks allowed the last few years of rates to happen)

Base rate is a macro-level concern that should be approached as one of many contributory levers to the whole economy.  As an individual, what the base rate was in 1952, 2002, or last Thursday means almost nothing.  Neither, realistically, does any trend in that rate.  If you take an effectively fixed-interest deal, which most do (not just in terms of mortgage, but all debt), the only thing that really matters is what the retail rate is at the point when the deal ends.  Whether it goes up, down or sideways in between is completely irrelevant.  People who think it is an important metric are those who chase the market and end up getting burned.

Which random historical average - which actually refer to different rates at different points in the past - do you think is the magic one that things will always happily sit at?  Don't you think that there are other things that might also feed into the 'best' rate which can change over time?

Or is your perspective that fundamentally the economy now is the same as it was in 1750 and it will be exactly the same in 2250, so actually the rate is pointless - in which case why do any trends in it matter then?

No, my perspective is that there is a one off near zero rate (that lasted a long time) due to massive central bank intervention, and a more normal "trend" that we can see from historical data, the smart mortgage borrower will look at the trend not the abnormal period.

Ignore the near zero and the normal trend over the last 40 years is downwards.

More recently the trend has been upwards. The great bond bull market is over. 

Yes, a very fast and noticeable upwards.

A sudden correction of Base Rates. Has a long way to go yet to filter out into the real economy. Even if Base Rate falls slightly there's still upward pressure on borrowing costs as a whole. 

What effect do you think the political changes in the EU will have?

None at all. The international money markets wield huge power and influence. Greater than democratically elected Government. 

They respond to the results of elections though, they don`t operate in a void of their own. My take is that there will be more upward pressure on rates and generally more volatility going forward.

I love the "if i keep saying the same thing, I might be right eventually" approach.

https://www.express.co.uk/finance/personalfinance/1910828/mortgage-barclays-tsb-interest-rates

Seems to say the opposite of what you were suggesting?

buyers who wait to agree a new mortgage deal might see reductions later in the summer

Quite a positive article, certainly not the doom and gloom you keep predicting.

There is also an element of lenders managing levels of new business through these adjustments as some are struggling with demand for their products and managing to service the level of applications

 Might, or Might Not, two dangerous phrases when you are taking on a large decades long debt, just ask anyone coming off a fixed rate recently.

lojo1000

Here are 2 charts to consider.
1. 5y money priced around 4% which is near the middle of the c.35 year range since 1987. Not at an extreme I think we can all agree.
2. Unemployment rate. Near 4% but I hope we can also agree, it is at a low over the same period since 1987.

Why would any central banker (not politically or personally motivated with an investment in a private offshore LLP) think rates need to be cut with unemployment at historic lows and yields at historic average?





Even the M4 money supply is on an upward path again post a dip in 2023 as rates rose, chart 3. This will facilitate demand and reflects the acceptance by businesses and consumers to take on debt. 



So why is GDP growth so slow? (hint: it is not Covid or Russia)

I think what is happening is a combination of 2 factors.

1. On the demand side, people are slowing spending. They are borrowing to get by (higher general prices and higher asset prices mean ppl and business need to have higher debts) but not to increase the volume of business/spending they undertake (which would generate real GDP=volumes not nominal values).

2. On the supply side, we are less productive due to the financialisation of the economy (the curse of developed countries post the maturity of their service industries); i.e. GDP has been driven more by debt and higher asset prices which have stimulated non-productive industries (financial and corporate industry pushing bits of paper and money around the economy) at the expense of productive industry (physical goods and services).

In simple terms by way of an example, combining the 2 effects:

The issue over the past 20+ years has been the reliance of govts on increasing debt levels in the economy to drive spending and asset prices higher which has stimulated speculation (or "confidence" if you prefer that term) which has driven transactions in non-productive assets; e.g. pre-existing house sales at ever higher prices.

Having strong housing turnover driven by rising prices does not build more houses and house more people (which would be productive) but it does still generate real GDP (as measured) due to higher sales revenue recorded by mortgage banks (volume of mortgage interest earned due to higher value & volume of mortgages).  A buoyant housing market does generate secondary real GDP however; e.g. furniture, white-goods.

Nominal GDP is deflated by general inflation not asset inflation so rising house prices (asset inflation) does not have the impact of reducing real GDP.  On the contrary, buoyant housing turnover of pre-existing houses and rising house prices does generate real GDP (as measured). On paper, the country appears to be getting richer.

The issue:

Govts have created economies reliant on debt to drive speculation/confidence and GDP growth. If asset prices stop rising and turnover falls then even the secondary industries reliant on housing turnover also begin to stagnate and will eventually lead to unemployment. Which is why central bankers tend to cut rates before they sniff this out.

The solution:

Drive turnover not based on the promise of ever higher prices but need. Cap leverage allowed in housing purchases to reduce ROI which in turn reduces monetary demand and in turn prices which brings housing affordability into the reach of ordinary people (need) rather than leveraged corporate structures hoarding wealth in offshore limited partnerships which structure to pay no UK tax.

Keep rates where they are and allow market prices to adjust volumes. Once prices fall to levels which people can afford without raising their indebtedness, they will buy and volumes can once again increase.

ReadySteadyPop

"Keep rates where they are and allow market prices to adjust volumes. Once prices fall to levels which people can afford without raising their indebtedness, they will buy and volumes can once again increase."

What is happening at the moment is lower volumes in response to sellers refusing to lower their expectations (and banks down-valuing/being more cautious who they lend to) ?

Hoenir

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

ReadySteadyPop said:

Hoenir said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

BarelySentientAI said:

ReadySteadyPop said:

sevenhills said:

fergie_ said:

The mortgage market lags slightly behind the swap markets. Swaps had been coming down - hence some small cuts - and are now creeping back up.

But what should the interest rates be, to benefit the whole economy? Savers need a little interest and businesses need lowish rates.

7% base rate is the historical average I believe?

Pick whatever data you want to get whatever result you want.  You could get anywhere from 2% to 15% as the "historical average".

Can you show me how you get 15% as the average?

By defining "historical" to be 1979 - 1982.  That is a period in history, so it is a historical average.  Not a good one, but then any selected period is arbitrary. 

There is no such thing as "the historical average".

Economists tend to use meaningful chunks of time, 25 years for example, because that is the term of an average mortgage (well used to be) or even longer, I think the 7% figure is a 300 year average maybe, that would be classed as "historical" surely? You seem to be trying to say that interest rates don`t matter much when it is obvious they do matter a great deal to a great number of people, what happens if the four or five years of 15% happens right after your fix on a big mortgage taken at a much lower rate ends?

They don't directly matter that much to any individual, and any selected trend or average is even less useful.

Planning on timing the market, either in terms of interest rate or value, is a fool's errand.

So you don`t think people care about the cost to service their debt, or do you mean something else? What I mean is that the historical averages are a good guide to where rates tend to go without intervention (only massive intervention by central banks allowed the last few years of rates to happen)

Base rate is a macro-level concern that should be approached as one of many contributory levers to the whole economy.  As an individual, what the base rate was in 1952, 2002, or last Thursday means almost nothing.  Neither, realistically, does any trend in that rate.  If you take an effectively fixed-interest deal, which most do (not just in terms of mortgage, but all debt), the only thing that really matters is what the retail rate is at the point when the deal ends.  Whether it goes up, down or sideways in between is completely irrelevant.  People who think it is an important metric are those who chase the market and end up getting burned.

Which random historical average - which actually refer to different rates at different points in the past - do you think is the magic one that things will always happily sit at?  Don't you think that there are other things that might also feed into the 'best' rate which can change over time?

Or is your perspective that fundamentally the economy now is the same as it was in 1750 and it will be exactly the same in 2250, so actually the rate is pointless - in which case why do any trends in it matter then?

No, my perspective is that there is a one off near zero rate (that lasted a long time) due to massive central bank intervention, and a more normal "trend" that we can see from historical data, the smart mortgage borrower will look at the trend not the abnormal period.

Ignore the near zero and the normal trend over the last 40 years is downwards.

More recently the trend has been upwards. The great bond bull market is over. 

Yes, a very fast and noticeable upwards.

A sudden correction of Base Rates. Has a long way to go yet to filter out into the real economy. Even if Base Rate falls slightly there's still upward pressure on borrowing costs as a whole. 

What effect do you think the political changes in the EU will have?

None at all. The international money markets wield huge power and influence. Greater than democratically elected Government. 

They respond to the results of elections though, they don`t operate in a void of their own. My take is that there will be more upward pressure on rates and generally more volatility going forward.

Events in France have shown how quickly sentiment can change and there hasn't even been an election yet.