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

[Deleted User]

We are looking at close to 6% and prob 6% by this time next year. The music has stopped. 

jjmmww1

Sounds like bad new for me rate is due to run out dec 2024 anyway to work out what i could be paying from then? if rates go to 6%?

NorfolkCanary

weddingringman said:

NorfolkCanary said:

Deleted_User said:

If they were serious it would be a 1% raise. Typical of the modern world, nobody wants to make the omelette. 

you'll have to explain what raising the base rate will do to lower inflation? Especially given profit margins seems to be fairly stable.

By reducing demand as borrowing becomes more expensive and therefore less appealing. House prices being the obvious example.

Except it won't. Demand will stay high as people surprisingly still need to eat, renovate, purchase etc..
Job demand is high, wage rise demand is high.
Energy prices rises are still baked into previous figures.
Fuel is (relatively to a few years ago) high.
Demand for food/drinks/parties etc.. are high.
People are still buying holidays, car, gadgets etc...
Food is expensive, yet people still buy Heinz beanz, cos 'brand name'.

people are just dumping demand onto CC's because they've become accustomed to "cheap credit yo!" that will not change over several months. They'll think about 'paying back' later.

The only slight decrease will be in sales, house prices (if you call <10% a fall) & purchasing power. Oddly the replacement for those people will be foreign investors taking up cheaper properties to rent out.

lojo1000

NorfolkCanary said:

weddingringman said:

NorfolkCanary said:

Deleted_User said:

If they were serious it would be a 1% raise. Typical of the modern world, nobody wants to make the omelette. 

you'll have to explain what raising the base rate will do to lower inflation? Especially given profit margins seems to be fairly stable.

By reducing demand as borrowing becomes more expensive and therefore less appealing. House prices being the obvious example.

Except it won't. Demand will stay high as people surprisingly still need to eat, renovate, purchase etc..
Job demand is high, wage rise demand is high.
Energy prices rises are still baked into previous figures.
Fuel is (relatively to a few years ago) high.
Demand for food/drinks/parties etc.. are high.
People are still buying holidays, car, gadgets etc...
Food is expensive, yet people still buy Heinz beanz, cos 'brand name'.

people are just dumping demand onto CC's because they've become accustomed to "cheap credit yo!" that will not change over several months. They'll think about 'paying back' later.

The only slight decrease will be in sales, house prices (if you call <10% a fall) & purchasing power. Oddly the replacement for those people will be foreign investors taking up cheaper properties to rent out.

Agree. People built up a cushion over the last 2 years since Covid and that money takes a long time to be worked off.

Demand will not come down in any material way until employment falls. Then, you don't have a choice, you have to cut back.

TheAble

jjmmww1 said:

Sounds like bad new for me rate is due to run out dec 2024 anyway to work out what i could be paying from then? if rates go to 6%?

Just plug it into a mortgage calculator using 6%, remaining balance, remaining term.

Eirambler

If the base rate is 6% though (which it likely will be), bear in mind that your mortgage rate will be higher again. Expect 7% plus at that point for a 2 year fix.

They'll eventually moderate back down but I doubt we'll ever see rates similar to the last 10 years again in our lifetimes.

ader42

Government say they want inflation to reduce, but the reality is it benefits them if it doesn’t reduce as it inflates away debt. It’s a case of follow the money, don’t listen to political sound-bites.

Even a BOE base rate of 6% is below the historical average, it will go higher of that I am sure. 

Most of us on fixed mortgages haven’t felt any mortgage pain yet.

lmitchell

ader42 said:

Government say they want inflation to reduce, but the reality is it benefits them if it doesn’t reduce as it inflates away debt. It’s a case of follow the money, don’t listen to political sound-bites.

Even a BOE base rate of 6% is below the historical average, it will go higher of that I am sure. 

Most of us on fixed mortgages haven’t felt any mortgage pain yet.

It may inflate away debt, but it will make any investment in public sector infrastructure extortionate and we'll be forced to pay higher taxes to pay for it as a result - something neither political party will be prepared to countenance for the electorate going into an election.

If we want a chance to properly recover from Covid-19, we need bank rate much lower. Even 3% would be enough to encourage sustainable economic growth.

weddingringman

NorfolkCanary said:

weddingringman said:

NorfolkCanary said:

Deleted_User said:

If they were serious it would be a 1% raise. Typical of the modern world, nobody wants to make the omelette. 

you'll have to explain what raising the base rate will do to lower inflation? Especially given profit margins seems to be fairly stable.

By reducing demand as borrowing becomes more expensive and therefore less appealing. House prices being the obvious example.

Except it won't. Demand will stay high as people surprisingly still need to eat, renovate, purchase etc..
Job demand is high, wage rise demand is high.
Energy prices rises are still baked into previous figures.
Fuel is (relatively to a few years ago) high.
Demand for food/drinks/parties etc.. are high.
People are still buying holidays, car, gadgets etc...
Food is expensive, yet people still buy Heinz beanz, cos 'brand name'.

Almost every example you’ve given has been reported in the news in recent months as being on the decline. 

Yes, some things will always be in demand, but borrowing money for a new house, a holiday or car is getting costlier and it’s irrefutable that this will reduce demand, not increase it.

Again, look at property transactions in the first instance. Sales volumes for this time of the year are down 25-30%. Purely because rates have risen. 

I can’t understand anyone averse to typical rates of 5 or 6%…. Have they learned nothing about what near 0% borrowing does to the costs of goods? That’s one of the main reasons for inflation right now. 

ader42

lmitchell said:

It may inflate away debt, but it will make any investment in public sector infrastructure extortionate and we'll be forced to pay higher taxes to pay for it as a result - something neither political party will be prepared to countenance for the electorate going into an election.

I think in time, when you’ve been around as long as me, you’ll find that they mostly care about getting re-elected and lining their own pockets.

But they will be happy to get rid of old debt and start anew at higher cost - it’s not their own money see? 
And the companies they own that get the contracts won’t mind the higher prices they can charge.

They always say they can’t afford this, they can’t afford that, then all of a sudden they can decide to print money out of thin air by the bucketload. For Nightingale hospitals that never get built and eat-out to spread it about schemes etc.

How many homes could they have built instead of wasting fortunes on unusable PPE etc.

Truth is they make choices - choices that suit them at the time - and they saw that they could line their own pockets massively by printing money - but that trick has had to be halted and they’re happy for now with their big fat proceeds.

Income Tax bands will be frozen to generate more income to pay for the higher cost. Inevitable. 

I think time will show that they are already in the process of the next scheme to make the rift between rich and poor wider - we just haven’t seen their next end-game yet.