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

Aberdeenangarse

Inflation rate should be slightly less than 8% for April, as energy prices drop out of the picture. Anymore than that and we really do have a problem!

MattMattMattUK

Aberdeenangarse said:

Inflation rate should be slightly less than 8% for April, as energy prices drop out of the picture. Anymore than that and we really do have a problem!

In theory the energy price falling in Q3 and Q4 could actually lead to a deflationary situation, there are still reliable predictions that we could actually experience deflation in 2024 as energy price fall and other costs stop rising when the baked in cost of energy and labour increases has worked it's way through. 

clueless_but_curious

MattMattMattUK said:

In theory the energy price falling in Q3 and Q4 could actually lead to a deflationary situation, there are still reliable predictions that we could actually experience deflation in 2024 as energy price fall and other costs stop rising when the baked in cost of energy and labour increases has worked it's way through. 

Quite right 3Matt. 

I am remortgaging in November '23.  I had been slightly nervous although I thought the base rate would start retracting by this summer.  However the Gilt rates are still high so I cannot see that happening and broadly agree with others that it is more likely to creep up or remain flat until the Australians arrive for the Ashes.  I am now quite excited at the prospect of a tracker with a very skinny margin over a longer period 

Strummer22

Do the Aussies bring deflationary pressures with them?? They certainly might burst England's bubble... or maybe we'll see a repeat of the glorious 2005 series. We can only hope!

With energy costs set to fall, the cost of production will fall although as noted labour costs won't fall. If there are no more significant price shocks for food (no severe floods and droughts and no significant conflicts in the places we import food from - these conditions far from being a given of course!) then discounters will lead the way in cutting prices, forcing competitors to follow suit.

In my view it's not IF these deflationary pressures take effect, but WHEN. I can't see how raising interest rates a bit more will make much difference. Does it give the BoE some kind of illusion of control when really the vast majority of current inflationary pressures are external?

Anyways, if I had to guess I'd say inflation will be below 1% by Q3 next year.

RelievedSheff

Strummer22 said:

Do the Aussies bring deflationary pressures with them?? They certainly might burst England's bubble... or maybe we'll see a repeat of the glorious 2005 series. We can only hope!

With energy costs set to fall, the cost of production will fall although as noted labour costs won't fall. If there are no more significant price shocks for food (no severe floods and droughts and no significant conflicts in the places we import food from - these conditions far from being a given of course!) then discounters will lead the way in cutting prices, forcing competitors to follow suit.

In my view it's not IF these deflationary pressures take effect, but WHEN. I can't see how raising interest rates a bit more will make much difference. Does it give the BoE some kind of illusion of control when really the vast majority of current inflationary pressures are external?

Anyways, if I had to guess I'd say inflation will be below 1% by Q3 next year.

They will need to raise interest rates further to protect the value of the pound.

Whilst ever the larger economies are raising interest rates the BOE will follow suit.

Aberdeenangarse

It looks  like another 0.25% rise is nailed in for tomorrow. It’ll be interesting to see what the Inflation figures for April will be, when announced, in a couple of weeks time.

No19v87

Aberdeenangarse said:

It looks  like another 0.25% rise is nailed in for tomorrow. It’ll be interesting to see what the Inflation figures for April will be, when announced, in a couple of weeks time.

Naïve question but would this have an immediate impact on applications in progress? 

Strummer22

No19v87 said:

Aberdeenangarse said:

It looks  like another 0.25% rise is nailed in for tomorrow. It’ll be interesting to see what the Inflation figures for April will be, when announced, in a couple of weeks time.

Naïve question but would this have an immediate impact on applications in progress? 

I think it depends on the lender. If you don't have an offer yet, the product could be pulled or you could be offered a higher rate. That's unlikely because the lenders will have known this rate rise was coming and priced accordingly. 

If you've got an offer it would be rare, but not unheard of, for the lender to pull the rug out from under your feet. I think that happened to some people in September after Trussnomics broke the economy.

Sarngate

HSBC seem to have changed some rates, offer I’ve generated just now is 0.2% higher than two days ago when I last checked.

london21

This is not sustainable.

more rent increases and more landlords might sell up