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Are we expecting the BOE Base Rate to drop to 4% on 7th August?

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  • lojo1000
    lojo1000 Posts: 288 Forumite
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    I suspect Trump is relying on the Fed cutting to balance the impact on trade. Nothing better for those with assets than lower rates. What does a central bank do in the face of lower demand.......they lower rates.

    Should they? No. They should allow markets to adjust over time. Prices clear markets not central banks.

    Trump has more guts than Powell, disinflation and potentially deflation is coming. Central banks will cut rates ( I will be impressed if they don't).

    The interesting question only is .......will CBs cut before jobs start getting cut in big numbers. If they are too late then they will continually be playing catch-up.
    To solve inequality and failing productivity, cap leverage allowed to be used in property transactions. This lowers the ROI on housing, reduces monetary demand for housing, reduces house prices bringing them more into line with wage growth as opposed to debt expansion.

    Reduce stamp duty on new builds and increase stamp duty on pre-existing property.

    No-one should have control of setting interest rates since it only adds to uncertainty. Let the markets price yields, credit and labour.
  • IAMIAM
    IAMIAM Posts: 1,334 Forumite
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    Good to hear, because the next 2-3% era, I am fixing long term! 
  • Hoenir
    Hoenir Posts: 7,742 Forumite
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    edited 6 April at 5:28PM
    lojo1000 said:
    I suspect Trump is relying on the Fed cutting to balance the impact on trade. Nothing better for those with assets than lower rates. What does a central bank do in the face of lower demand.......they lower rates.


    The Federal Reserve Rate and the BOE base rate are fundamentally different. The Fed sets the rate at which banks lend to each other. Whereas the BOE sets a rate at which it will lend to commercial banks. 

    Trump administration is focused on the 10 year Treasury stock yield. As this is what drives mortgage rates in the US. 

    Also the focus in the USA is a reduction of Government borrowing. The cost of servicing the debt burden is increasing fast. Lower Treasury yields aid this objective. 
  • lojo1000
    lojo1000 Posts: 288 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Hoenir said:
    lojo1000 said:
    I suspect Trump is relying on the Fed cutting to balance the impact on trade. Nothing better for those with assets than lower rates. What does a central bank do in the face of lower demand.......they lower rates.


    The Fed sets the rate at which banks lend to each other. 

    Where did you hear that from? Bank are free to agree rates between themselves. 
    To solve inequality and failing productivity, cap leverage allowed to be used in property transactions. This lowers the ROI on housing, reduces monetary demand for housing, reduces house prices bringing them more into line with wage growth as opposed to debt expansion.

    Reduce stamp duty on new builds and increase stamp duty on pre-existing property.

    No-one should have control of setting interest rates since it only adds to uncertainty. Let the markets price yields, credit and labour.
  • IAMIAM
    IAMIAM Posts: 1,334 Forumite
    Fifth Anniversary 500 Posts Name Dropper
    I am reading articles suggesting there will be a cut every time they meet now until year end, taking BOE 3.25%

    I have noticed most tracker mortgages have remained as is in terms of rates, but fixes are continuing to drop.

    I am hoping for the articles to be correct, as I have secured a 4.74% tracker for two years hoping to fix onto a 5 year when rates are around 2-3% again.....if the BOE rate is around 3.5% middle of next year....
  • Hoenir
    Hoenir Posts: 7,742 Forumite
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    IAMIAM said:
     hoping to fix onto a 5 year when rates are around 2-3% again.....
    That ship has well and truly sailed. 
  • Silvertabby
    Silvertabby Posts: 10,123 Forumite
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    Hoenir said:
    IAMIAM said:
     hoping to fix onto a 5 year when rates are around 2-3% again.....
    That ship has well and truly sailed. 
    The long term average is 5%. Those years of super low rates were the anomaly, not the current rates.
  • IAMIAM
    IAMIAM Posts: 1,334 Forumite
    Fifth Anniversary 500 Posts Name Dropper
    Hoenir said:
    IAMIAM said:
     hoping to fix onto a 5 year when rates are around 2-3% again.....
    That ship has well and truly sailed. 
    So why are there fixes at 3.8% with a BOE rate of 4.5%?
    Does this mean fixes will be 5% when the BOE rate is 3.5%? 
    I think not
  • Hoenir
    Hoenir Posts: 7,742 Forumite
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    edited 5 May at 10:45PM
    IAMIAM said:
    Hoenir said:
    IAMIAM said:
     hoping to fix onto a 5 year when rates are around 2-3% again.....
    That ship has well and truly sailed. 
    So why are there fixes at 3.8% with a BOE rate of 4.5%?
    Does this mean fixes will be 5% when the BOE rate is 3.5%? 
    I think not
    Product fees? 40% deposits ? 

    Quantative Tightening continues to drain liquidity from the banking system every month. Still some way to go. 


  • Strummer22
    Strummer22 Posts: 713 Forumite
    Ninth Anniversary 500 Posts Name Dropper Combo Breaker
    IAMIAM said:
    Hoenir said:
    IAMIAM said:
     hoping to fix onto a 5 year when rates are around 2-3% again.....
    That ship has well and truly sailed. 
    So why are there fixes at 3.8% with a BOE rate of 4.5%?
    Does this mean fixes will be 5% when the BOE rate is 3.5%? 
    I think not
    Maybe, if the market expectations are for a significant rise in rates.

    Fixes below base rate = market expectation of rate cuts.
    Fixes above base rate = market expectation of rate rises. 

    Obviously there will be a range of fixed rates available. It depends on the borrower's circumstances which products they can get.
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