Base rates will increase again

jimjames

Nebulous2 said:

I'm still doing my own observations of hospitality and tourist spots, and can't see many signs of people holding back. 

Data coming through seems to suggest spending is more cautious than it has been, so that may be a positive sign. 

I'm seeing similar but looking at other data for high end cars there definitely is a slow down in the market and people trying to offload vehicles that are not selling. It might just be a matter of time before that sort of effect starts to filter down to the rest of the economy.

sevenhills

Exodi said:

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:

The Bank of England would agree with you, because their main measure of inflation doesn't even include housing costs(CPI).

Just go over to the mortgage board to see how much more people are paying on their mortgages "variable rate and has rocketed from £650ish when fixed to now over £1100". What percentage increase is that, luckily Andrew Bailey isn't concerned.

XzavierWalnut

sevenhills said:

With the Fed increasing interest rates today, it looks very certain that the Bank of England will increase rates again on Thursday 3 August, by 0.25 or 0.50?

There is always speculation about the most recent increase being the last increase, but it's also about the strength of Sterling and the expectations of the market.

I'm looking at putting 30k away into a fixed savings account for 1, maybe 2 years. Just missed out on 6% with YBS, as I did not put the money in quick enough. I am aware that there are slightly higher rates than this, but I am trying to reduce the amount of companies that I invest with, so would prefer one I am already with. Already maxxed with ISAs.
At the moment looking at Tesco  5.85% and Aldermore 5.9% to 6%.
My question is, is it worth waiting until after the BOE meeting next week, to see if the rates go up again?

DavidAC

Open an account now if you think it might disappear. Wait until after the BOE meeting and then decide if you want to fund it. Most allow at least 2 weeks to fund.

Sg28

sevenhills said:

Exodi said:

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:

The Bank of England would agree with you, because their main measure of inflation doesn't even include housing costs(CPI).

Just go over to the mortgage board to see how much more people are paying on their mortgages "variable rate and has rocketed from £650ish when fixed to now over £1100". What percentage increase is that, luckily Andrew Bailey isn't concerned.

sevenhills said:

Exodi said:

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:

The Bank of England would agree with you, because their main measure of inflation doesn't even include housing costs(CPI).

Just go over to the mortgage board to see how much more people are paying on their mortgages "variable rate and has rocketed from £650ish when fixed to now over £1100". What percentage increase is that, luckily Andrew Bailey isn't concerned.

Increasing costs on mortgages is part of the plan of raising rates. Meaning many people have less disposable income and preventing money being spent in the wider economy and pushing up prices. 

XzavierWalnut

DavidAC said:

Open an account now if you think it might disappear. Wait until after the BOE meeting and then decide if you want to fund it. Most allow at least 2 weeks to fund.

Thanks, good point, I had not thought about that.

subjecttocontract

Some of us got a 10%+ state pension increase in April. Nothing else compares to that recently.

PixelPound

Sg28 said:

sevenhills said:

Exodi said:

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:

The Bank of England would agree with you, because their main measure of inflation doesn't even include housing costs(CPI).

Just go over to the mortgage board to see how much more people are paying on their mortgages "variable rate and has rocketed from £650ish when fixed to now over £1100". What percentage increase is that, luckily Andrew Bailey isn't concerned.

sevenhills said:

Exodi said:

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:

The Bank of England would agree with you, because their main measure of inflation doesn't even include housing costs(CPI).

Just go over to the mortgage board to see how much more people are paying on their mortgages "variable rate and has rocketed from £650ish when fixed to now over £1100". What percentage increase is that, luckily Andrew Bailey isn't concerned.

Increasing costs on mortgages is part of the plan of raising rates. Meaning many people have less disposable income and preventing money being spent in the wider economy and pushing up prices. 

ONS states 

• There were an estimated 27.8 million households in the UK in 2020, an increase of 5.9% over the last 10 years.

• https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/bulletins/familiesandhouseholds/2020
  

And that the number of people remortgaging in 2023 was "More than 1.4 million households" 
 https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/howincreasesinhousingcostsimpacthouseholds/2023-01-09.

So 5% of households for the whole of 2023.

Think we've probably more rises to come, though it will probably be other reasons that will slow things down, e.g. income vs living costs for the non-pensioners.

phillw

jimjames said:
I'm seeing similar but looking at other data for high end cars there definitely is a slow down in the market and people trying to offload vehicles that are not selling. 

While that is probably a big deal for the car manufacturers, I'm not sure how much effect it will have on inflation as cars aren't a huge part of everyday spending.

It might end the ridiculous situation in second hand cars, causing the majority of sales to be of troublesome cars (made worse by issues in the industry that is causing worrying failure rates of some models at 60k miles).