ING - What will they do when the rates drop?

thor

It looks like the BOE will soon be dropping saving rates so what are the chances that ING will drop theirs by less. Remember they raised their rates by only 0.15% & 0.1% a few times when the boe rates were going up ny 0.25% at a time? When they did this I jumped ship to Cahoot and am eagerly waiting to see if they can get themselves back in my good books.

Stonk

Yes - if the BoE drops rates (far from certain), it will be a telling moment. I recall that when the BoE raised rates 5 times by 0.25%, ING never once matched the full 0.25%; while the base rose 1.25%, ING's rates rose 0.9%. This annoyed me too.

deemy2004

The currency is falling it is very difficult for the BOE to cut rates with a weak currency... its 50/50 whether rates will be cut... even then there are long-term inflationary pressures that will eventually result in a resumption of the uptrend in interest rates.

surfcat

..and the overall trend in world rates is upwards. Pressures in the US are pushing the Fed rates up, and that makes it unlikely ours will drop. All the 0% credit deals we had here over recent years were funded by miniscule rates in the US. These have all started to dry up now that rates are rising there.

At the moment cahoot rates are only 5.05% so they aren't really any better than ING, who have a far more user-friendly website.

meanmachine_2

deemy2004 wrote:

The currency is falling it is very difficult for the BOE to cut rates with a weak currency... its 50/50 whether rates will be cut... even then there are long-term inflationary pressures that will eventually result in a resumption of the uptrend in interest rates.

The Bank should have put rates up earlier in the year, giving them room for maneouvre now. I suspect they'll do nothing for the time being.

The pickle they're in is one of their own making. and these are meant to be experts?!!!

However Mervyn has explained that the link between house prices and consumer spending has been "underestimated", meaning that they'll do anything and everything they can to help shore up the property market. And that means, regardless of the damage it'll do in the long run, they'll start cutting rates sooner rather than later.

Remember, Gordo wants to get into No 10 so can't afford for the market to crash in the meantime.

deemy2004

The problem is that there is a lot of money sloshing aroudn the system ! A LOT !

Historically this means inflation...

Looking at the behaviour of the stock market it is clear that this excess cash is now starting to flow into equities, so housing may suffer, but the economy may continue growing at a healthy pace as equities take over the mantle of capital growth !

All this means is that even with a weakening , falling housing market. rates won't be cut as long as the economy continues to grow ! Which is precisely what the equity market is saying by hitting new 3 year highs !

Dreaaaaaming of FTSE 6000 ..........

alared

Back to the original question.
They will do what some greedy providers have already done (AND WILL BE QUICK TO DO AGAIN)-- cut their savings rate.
Although BoE interest rates are not expected to be cut `til Sept.
A lot can happen by then.

Stonk

I believe the real question was whether or not they'd have the gall to drop the full 0.25%, given that they never raised the full 0.25% in the past.

dealseeker

Stonk wrote:

I believe the real question was whether or not they'd have the gall to drop the full 0.25%, given that they never raised the full 0.25% in the past.

It is a very good question. Its all a question of ethics and how muchthey can hoodwink custoerms with fancy marketing. D'ya think they'll notice?

Will watch with "interest".