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

lojo1000

sevenhills said:

lojo1000 said:

More pain for those looking to remortgage today as wages rise more than expected.

Surely there are more things causing inflation than just wage increases/decreases?

I would say that wage increases 4% below inflation is causing inflation to decrease.

Agreed, wages is just one albeit large part of a business expense. More so in service industries than goods which is where the inflation will prove most sticky.

And agree again with your second point; not forgetting target inflation is 2%.

My belief is inflation will come down provided the BoE and govt don't lose their nerve.

My interest comes after that. Does the BoE cut rates again and encourage debt to stimulate confidence. Or does it recognise the long term folly of raising debt burdens?

lojo1000

Market doesn't appear to be done yet in selling 2y gilts, yields now at 5%.

TheAble

lozenlady said:

Maka344 said:

Couldn't the Bank's just agree to extend current fixed deals to prevent mass repossessions? 

What about the huge number people who have already remortgaged onto higher rates in the last year? 

It's still dependent on the market rate for money. The bank is not going to borrow at 6% and lend it to someone at 4%. They'd be making a guaranteed loss.

Aberdeenangarse

lojo1000 said:

Market doesn't appear to be done yet in selling 2y gilts, yields now at 5%.

I’m wondering just how much higher they will go?

lojo1000

Aberdeenangarse said:

lojo1000 said:

Market doesn't appear to be done yet in selling 2y gilts, yields now at 5%.

I’m wondering just how much higher they will go?

I think we all are! 

Nobody knows but a lot of people have (unknowingly or unwittingly) bet on them not staying at this level; i.e. going back to where they were 2-10 years ago (as opposed to 10+ years ago).

Altior

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

IAMIAM

Altior said:

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

totally agree with this. 

sevenhills

lojo1000 said:

Agreed, wages is just one albeit large part of a business expense. More so in service industries than goods which is where the inflation will prove most sticky.

And agree again with your second point; not forgetting target inflation is 2%.

My belief is inflation will come down provided the BoE and govt don't lose their nerve.

My interest comes after that. Does the BoE cut rates again and encourage debt to stimulate confidence. Or does it recognise the long term folly of raising debt burdens?

Inflation is caused by too much money chasing after too few goods, Milton Friedman.

Governments would like you to think inflation is caused by increasing wages.

Our Government is borrowing record amounts, that money was given out during COVID, when the production of goods and services went down. That started inflation, then the Ukraine war made it much worse.

https://www.economicshelp.org/blog/111/inflation/money-supply-inflation/

RelievedSheff

Altior said:

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

Fully agree with this.

Thumbs_Up

Altior said:

There's a strange delusion with the property market, where people seem to want uber cheap borrowing forever, easy access to the market for first time/young buyers, a property market correction, stable property prices and no repossessions.

Repossessions must be possible, the cost of borrowing must be able to go up, it must be quite tough to access the market.

It's unfortunate if an individual or family is on the wrong side of one of those variables, but that is life. Big financial choices have risk attached to them. There has to be a moral hazard. You can't go to the limit to get a big house, borrow £40K to furnish it, get a £30K Audi on pcp, and expect other people to pick up the tab if interest rates go up. 

Ha, you should read some comments coming from the liberal party!