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Base rates will increase again
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Cus said:Anyone know why they just didn't bump up the rate by 2-3% six months ago rather than this monthly mini increases?No one has ever become poor by giving0
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thegentleway said:Cus said:Anyone know why they just didn't bump up the rate by 2-3% six months ago rather than this monthly mini increases?4
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thegentleway said:Cus said:Anyone know why they just didn't bump up the rate by 2-3% six months ago rather than this monthly mini increases?I am personally nervous of a crash this autumn. I come at this from a perspective of a saver - having closed down all my stagnant / low paying accounts earlier this summer and am looking for a fix for a decent term. Looks like the time will be right in the next fortnight.No man is worth crawling on this earth.
So much to read, so little time.0 -
boingy said:Cus said:Anyone know why they just didn't bump up the rate by 2-3% six months ago rather than this monthly mini increases?
For an example, take a look at the aftermath of the Liz Truss era. Markets hate big surprises, especially ones that politicians promote as "bold and radical".
Gently does it in the world of economics.
Overall it would have probably brought down our inflation quicker and we'd all be better off.0 -
Rosa_Damascena said:thegentleway said:Cus said:Anyone know why they just didn't bump up the rate by 2-3% six months ago rather than this monthly mini increases?I am personally nervous of a crash this autumn. I come at this from a perspective of a saver - having closed down all my stagnant / low paying accounts earlier this summer and am looking for a fix for a decent term. Looks like the time will be right in the next fortnight.
Out of interest, what are you specifically nervous about? Fixing at 6% now but then in a couple months time new fixes are announced at 8%? There's a lot to say with the Mathematics of delaying, and there's been several posters that have putt across several very well articulated and data-driven examples that the logic of constantly waiting for the next best fix may be detrimental, especially if the money is earning easy access rates for the interim.
Unfortunately banks are also not so quick to increase rates following a BoE change.Know what you don't0 -
ader42 said:This “crisis” is simply a return to lifestyles like the less afluent 1980s when we had higher taxation and nurses were paid £7k per year. Not a crisis really, just a readjustment of peoples reality.
Most of any “housing crash” that people are expecting will be due to inflation everywhere and not house prices coming down significantly imho.
I’m still expecting BOE base rate to get to the historical average of 7% as things are being taken (too) slowly.
My low mortgage fix is up next April
You've got me on a trip down memory lane.
We were living on two nursing salaries in the mid-eighties. I can't remember what we were earning, but it was enough to buy a reasonable flat, and looking back we had a feeling that the world was our oyster and a great deal was within our grasp. I was able to take an additional part-time job and earned enough in 6 months to pay for a new kitchen.
We managed a fairly regular curry, regular trips to the pub to listen to live music, quite a few camping trips, and our first (and only for a long time) new car.
I'm not sure much of that would be possible now on two starting qualified nurses salaries.0 -
Cus said:Anyone know why they just didn't bump up the rate by 2-3% six months ago rather than this monthly mini increases?0
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Exodi said:
Now couple this with the fact that most UK mortgages are held with fixed term promotional periods and you are left with the current situation where the majority of mortgage holders are still cruising on fixed 1-2% interested rates. I'm (fortunately?) in this group for now.
The business debt will lead to higher prices, that will feed the inflation even more.0 -
sevenhills said:Exodi said:
Now couple this with the fact that most UK mortgages are held with fixed term promotional periods and you are left with the current situation where the majority of mortgage holders are still cruising on fixed 1-2% interested rates. I'm (fortunately?) in this group for now.
The business debt will lead to higher prices, that will feed the inflation even more.
I completely disagree with the assertion that increased interest rates will increase inflation.
The whole point of increasing interest rates is to encourage saving and discourage spending. Reduced spending = reduced demand and reduced demand = reduced prices.
At least that is the theory believed by most economists and adopted by the BoE. Obviously if there was a genuine belief outside of your comment that increasing interest rates increases overall inflation, don't you think the BoE would have been dropping interest rates instead?
I doubt Andrew Bailey will be speaking to his ops team:
"Right we've just agreed another 0.25% effective from the 4th August - can you update that on the system and push out communications?"
"No problem, 0.25% on the 4th August, loud and clear."
"Thanks, it's been quite the set of decreases over the past year"
"Decreases?" *gulp*
Know what you don't0 -
Well, Turkey tried to reduce interest rates as a means of combating inflation...:pBut yes, as above, increasing interest rates contributes much less to inflation via pass through than it takes away via reduced availability of money for spending/investment0
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