Are we expecting BOE to remain at 5.25% on 21st March 2024?

IAMIAM
IAMIAM Posts: 1,189
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edited 3 February at 10:44AM in Mortgages & endowments
Will trackers decrease further, ie a rate closer to the BOE rate, or is that it for trackers.....not much movement since January on them.....
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  • lmitchell
    lmitchell Posts: 107
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    My personal view for the last 6-12 months has been that 4.25% would mark the end of the tightening cycle. However, the SVB issues and talks of Goldman Sachs anticipating the UK's inflation rate falling below 2% BEFORE the end of the year would suggest that 4% bank rate is already doing the job. As so many of us had said, the energy crisis - which the UK economy wasn't to blame for - resulted in vast imported inflation. Take that out of the equation and things may start to settle again.

    I think the US Fed have wanted to tighten as far as they can before something serious breaks and the SVB issues may be enough for them to hit the pause button. If I was a betting man, I'd say it'll stick at 4% at the next meeting.
  • RelievedSheff
    RelievedSheff Posts: 11,126
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    I think there will be a small increase this month to 4.25%.
  • dimbo61
    dimbo61 Posts: 13,709
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    Two banks now gone bust in US and SVB UK taken over by HSBC means the BOE may sit on the fence this month to wait and see.
    Buy Land GOD is not making any more 🙏 
  • mi-key
    mi-key Posts: 1,581
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    Nobody knows for definite, but at least gas prices and inflation all seem to be moving in the right direction, and the economy is doing better than they had previously predicted. Hopefully it will all settle down now and we can get back to a more affordable normal without it really hurting too many people 
  • Dandytf
    Dandytf Posts: 4,786
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    I think there will be a small increase this month to 4.25%.
    Quite possibly.
    Replenished CRA Reports.2015 Zoe i nav -67-131 miles top charge. Savings depleted. VM Stream tv M250 Volted to M350 then M500.
  • Nailer99
    Nailer99 Posts: 131
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    There was a lot of competition on Tracker rates while Fixed rates were so high and this drove down the rates. This all changed though as the fixed rates started to drop and even though they have nosed higher again in the last month they are still competitive vs the trackers. I'd therefore expect few banks to be focusing on Trackers as their competitive product at the moment, and do not expect tracker rates to be changing much at all.

    BoE rate? Who knows. SVB may have given the bank a wake up call...
  • housebuyer143
    housebuyer143 Posts: 3,170
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    Nailer99 said:
    There was a lot of competition on Tracker rates while Fixed rates were so high and this drove down the rates. This all changed though as the fixed rates started to drop and even though they have nosed higher again in the last month they are still competitive vs the trackers. I'd therefore expect few banks to be focusing on Trackers as their competitive product at the moment, and do not expect tracker rates to be changing much at all.

    BoE rate? Who knows. SVB may have given the bank a wake up call...
    Many trackers are as low as 0.14% above base with others sitting at 0.29%. If they went much lower there would be no reason to do the deal as there is so little margin. For this reason I think we won't see massive changes in trackers. 
  • aoleks
    aoleks Posts: 720
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    my guess is as good as anyone else's, but I believe we "peaked" with regards to base rates. if not, I can see a planned 4.25% in the near future as a latent reaction, as opposed to one that's needed. we're behind the curve, basically, and once things start to settle (and they will settle extremely quickly), we'll see quick reductions overall.

    the main issue was energy and it's obvious to everyone that Putin's plan to blackmail europe and the rest of the world backfired spectacularly. let's not forget that while we had a bit of luck this winter, we didn't even have to enforce measures to seriously reduce energy consumption. our office, for example, usually empty due to people working from home, is too hot to be in. we're heating buildings like mad for no reason.

    that means that energy prices have crashed (it takes some time for them to trickle down), fuel, while still expensive, is not unaffordable and a relatively large amount of vacancies means incomes, low as they are, are stable. supply chains are getting better, covid is starting to become but a bad memory and the chip issue is slowly, but surely being sorted out.

    I also see people around me adopt a different view towards spending, where essentials are the main priority, with a focus on stable housing, hence fixing mortgages or buying instead of renting, which is spiralling out of control. new cars are not as desirable anymore, since prices are stupidly high, so people are keeping their extremely lucrative deals from the last 2-3 deals, reducing motoring costs significantly.

    besides, if a recession does happen, rates will be forced down to what they were over the last 10 years and that means another wave of extremely cheap money on the market.
  • mi-key
    mi-key Posts: 1,581
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    aoleks said:
    my guess is as good as anyone else's, but I believe we "peaked" with regards to base rates. if not, I can see a planned 4.25% in the near future as a latent reaction, as opposed to one that's needed. we're behind the curve, basically, and once things start to settle (and they will settle extremely quickly), we'll see quick reductions overall.

    the main issue was energy and it's obvious to everyone that Putin's plan to blackmail europe and the rest of the world backfired spectacularly. let's not forget that while we had a bit of luck this winter, we didn't even have to enforce measures to seriously reduce energy consumption. our office, for example, usually empty due to people working from home, is too hot to be in. we're heating buildings like mad for no reason.

    that means that energy prices have crashed (it takes some time for them to trickle down), fuel, while still expensive, is not unaffordable and a relatively large amount of vacancies means incomes, low as they are, are stable. supply chains are getting better, covid is starting to become but a bad memory and the chip issue is slowly, but surely being sorted out.

    I also see people around me adopt a different view towards spending, where essentials are the main priority, with a focus on stable housing, hence fixing mortgages or buying instead of renting, which is spiralling out of control. new cars are not as desirable anymore, since prices are stupidly high, so people are keeping their extremely lucrative deals from the last 2-3 deals, reducing motoring costs significantly.

    besides, if a recession does happen, rates will be forced down to what they were over the last 10 years and that means another wave of extremely cheap money on the market.
    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
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