BoE keep Base Rate at 4.75%

ivegotabig1

Even when the rates do come down a quarter of a point it will make very little differance to the average mortgage..

deemy2004

nalibz wrote:

Wow deemy you get around!

I'm everywhere ! ....

Kenny4315

FTSE seems to be really rockin and rollin again, seems to go in spurts, then flattens for a while. After some patchy progress of late, seems to have jumped again. What's everyone's views about the year end postion of the FTSE 5600 ish ?

As I have said before I think interest rates at best will hover around this mark for some time, maybe 1/4 off but not much more, in the longer view they may even go up, given Britain's uncontrollable appetite for debt. Mr Brown et al, have too many inflationary factors that are out of there control, oil prices, oil supply, booming china, the wider world ecomony, etc.

deemy2004

My target at the start of the year WAS 5200....

Yeh it needs to pause before the next shift higher so probably it will mark time for the next 3 or 4 months ... May even see it dip below 5000.

5600 ? dunno, may close the year around 5300 - 5400.

MrBen_4

Are they ever going to put the rates up? Hopefully by year end it will be 5%+

meanmachine_2

It does hack me off that a rate cut is reported as being a good thing, but a rate rise as something negative.

This ignores millions (usually pensioners) who rely on interest to supplement their income.

A rate rise also suggests that the economy is doing well, so should be welcomed for that reason.

I suspect most reporters are saddled with mortgages and, like so many Brits, have no savings.

lisyloo

Even when the rates do come down a quarter of a point it will make very little differance to the average mortgage.

You are correct. However many cuts make a bigger difference.

I don't think any economist is predicting just one cut.
It will probably be the first of several.

meanmachine_2

lisyloo wrote:

You are correct. However many cuts make a bigger difference.

I don't think any economist is predicting just one cut.
It will probably be the first of several.

Whereas I predict we'll have one cut for "sentiment" reasons, then it'll be back up to 5% by the summer of 2006.

If, as some "experts" are predicting, we'll be down to 3.5% by the end of 2006, won't that mean our rates will be lower than the States?

And if so, has that ever happened before? (The answers is no, by the way, but i guess there's a first time for everything).

deemy2004

At this point in time 0.25% cut looks like the most that the BOE will do .. though I think it would be a mistake !

With broad money supply running along at 11% ! The last thing the economy needs is a cut in interest rates !

Infact ! a cut today will probably mean that rates will need to rise much further later on ! 5%... yes... 6% maybe !

Keep your eyes on the monthly inflation stats....

All it takes is one months shock figures of higher inflation and ALL this talk about rate cuts will be reversed into rate risess which will lead to a sharp rise in the money market rates near overnight !

meanmachine_2

Part of me still suspects that the Bank of England will be "encouraged" to take a relaxed view of inflation. So even if it tips over 2%, they'll probably still just argue that long-term it's on target.

Don't forget this is the same bank that hesitated to raise interest rates earlier in the year to over 5%. Had they done so, we would now be able to cut more than just a quarter of a percent.

Too little, too late, as always.