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

lojo1000

mi-key said:

I think if we were going to have a bad recession, we would have had it by now. All predictions are that if we do have one, it will be pretty shallow and short lived. Inflation is predicted to drop massively towards the end of the year ( possibly as low as 2% ), and interest rates to also be cut.

I can see a possible 0.25% rise in the base rate, but that may not even happen now depending on how the next couple of months go, and it may be for a short time only. There isn't really any reason for mortgage lenders to increase rates any more, I think we have pretty much hit the peak, and they will either drop slightly over the year, or stay static

The only reason BoE/Fed, etc are not going to raise rates is due to the impending economic collapse due to the contraction in the money supply caused by inflation and higher rates.

I'm afraid the age of free money and overvalued assets including property is over.

When low rates/ cheap money fed into asset prices, the rich were happy.

Covid meant money was also given to the poor/ those without assets - of course they spent it and that new money got into goods and services (whilst supply was restricted). Now central banks are working to stop that inflation becoming entrenched.

That means asset prices get hit at the same time and losses will emerge for those who were overleveraged. Loan losses mean a falling money supply and that further hits asset prices.

The asset owners loved the expanding money supply on the way up but they are not enjoying it on the way down.

#justmyopinion

aoleks

lojo1000 said:

mi-key said:

I think if we were going to have a bad recession, we would have had it by now. All predictions are that if we do have one, it will be pretty shallow and short lived. Inflation is predicted to drop massively towards the end of the year ( possibly as low as 2% ), and interest rates to also be cut.

I can see a possible 0.25% rise in the base rate, but that may not even happen now depending on how the next couple of months go, and it may be for a short time only. There isn't really any reason for mortgage lenders to increase rates any more, I think we have pretty much hit the peak, and they will either drop slightly over the year, or stay static

The only reason BoE/Fed, etc are not going to raise rates is due to the impending economic collapse due to the contraction in the money supply caused by inflation and higher rates.

I'm afraid the age of free money and overvalued assets including property is over.

When low rates/ cheap money fed into asset prices, the rich were happy.

Covid meant money was also given to the poor/ those without assets - of course they spent it and that new money got into goods and services (whilst supply was restricted). Now central banks are working to stop that inflation becoming entrenched.

That means asset prices get hit at the same time and losses will emerge for those who were overleveraged. Loan losses mean a falling money supply and that further hits asset prices.

The asset owners loved the expanding money supply on the way up but they are not enjoying it on the way down.

#justmyopinion

what economic collapse? also, the money that was given to those without assets ended up in the pockets of those with... because people spent that money. they bought anything from a tv to a house, which is why large companies made record profits.

why don't we all live our lives as we normally would and stop worrying about catastrophic events out of out control? you can't put life on hold until everything is perfect, otherwise you might as well stop living.

lojo1000

aoleks,

Sure, we should all continue to lives our lives but do so in the knowledge that prices are a reflection of how much money people are prepared to borrow (and banks to lend).

If the money supply stops increasing (and asset prices do not rise) then confidence of making a profit falls and that magic reverses.

Just take a look this week at the fear which central banks have shown about a fall in confidence...... US Federal Reserve bails out 2 banks and implicitly guarantees all uninsured customer deposits across the whole banking system. Swiss National Bank lends Credit Suisse $54bn to stop it from failing (Credit Suisse was only valued at $10bn yesterday.)

 mi-key,

 Any other comments on what I said?

[Deleted User]

Yes it’s expected and most likely the “final” increase. A lot of people on Bloomberg advised it would be the wrong choice to pause. Make of that what you will.

RelievedSheff

SmartyInvestor said:

RelievedSheff said:

I think there will be a small increase this month to 4.25%.

I would agree with you a small increase of .25% or maybe no increase. I think central banks will may pause rate hikes for a little while but this will mean inflation won't be coming down and potentially could go higher.

I think the US will pause their rate rises but we were somewhat slower at raising rates then they were. 

I think we will get another couple of small rises. 4.25% next week and then 4.5% at the next meeting which will take us to the peak with rates slowly starting to drop back from the beginning of next year down to around 3.5%.

dimbo61

Could be another bad day on Monday for the banks.

RelievedSheff

dimbo61 said:

Could be another bad day on Monday for the banks.

Unlikely.

One of the big banks will buy them out and calm will be restored.

RelievedSheff

SmartyInvestor said:

dimbo61 said:

Could be another bad day on Monday for the banks.

Yes I was thinking the same. Bond markets have been crashing all over the world. Looks like we are heading into a another financial crisis.

CS have been bought out this evening as expected. 

You will have to find another excuse for a house price "crash" Crashy!

Sea_Shell

RelievedSheff said:

dimbo61 said:

Could be another bad day on Monday for the banks.

Unlikely.

One of the big banks will buy them out and calm will be restored.

Doesn't look like the Asian Markets have been calmed by the news that UBS has agreed to bail out Credit Suisse !!


Hang Seng down 3%

mi-key

Sea_Shell said:

RelievedSheff said:

dimbo61 said:

Could be another bad day on Monday for the banks.

Unlikely.

One of the big banks will buy them out and calm will be restored.

Doesn't look like the Asian Markets have been calmed by the news that UBS has agreed to bail out Credit Suisse !!


Hang Seng down 3%

Markets always react in that way initially though, it will be back to where it was within a few days.