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"Bank of England To Cut Interest Rate by Up to 2%"
Comments
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nathanhill69 wrote: »"Bank To Cut Interest Rate by Up to 2%"
Well that's the headline/lead story on the front page of one of the London evening newspapers today. Apparently top economists in the city say the Bank of England have no choice but to start cutting base rates to as little as 3.5% as the credit crunch bites. They predict that by the end of the year the base rate would be cut to 4%, with further reductions in 2009 bringing the rate down to 3.5%....
Just paraphrasing the story (so don't shoot the messenger) but wondered what peoples thoughts on this are and the impact this may have on the mortgage market. Considering many customers are locking themselves into 5 year fixed rates at around 5.50 give or take - is this a decision they may regret.
I have my own opinions on this but wondered if people would care to discuss. The floor is open......
HAHAHAHAHAHAHAHA hhaaaaaaaaaaa, really thats so funny!!
:rotfl:
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mortgages are not based on the BOE base rate.
they are based on LIBOR and SWAP rates.
so even if the BOE cuts doesnt mean mortgages will get cheaper
Look at the last two cuts, mortgages are now MORE expensive than before the last 2 cuts0 -
Sorry, I almost mis-read that as the BOE will Put Up the interest rate by up to 2%.
It's almost as likely....For what I've done...I start again...And whatever pain may come ...Today this ends... I'm forgiving what I've done -AF since June 20070 -
mortgages are not based on the BOE base rate.
they are based on LIBOR and SWAP rates.
so even if the BOE cuts doesnt mean mortgages will get cheaper
Look at the last two cuts, mortgages are now MORE expensive than before the last 2 cuts
Unless you have a tracker mortgage of course, in which case they are obliged to pass on any cuts in BOE base rate (although they often drag their heels).
Must admit, I'm with the Victor Meldrews above - I just don't believe it.0 -
Its time people realised that the issue we are having runs far behond the BOE base rate.
Its about culture and greed and bad trading and risk taking!0 -
I think I heard this too. If it's the same story it came from the chairman of the CBI or small business association or something. Trying to claim that the BoE has to follow the US by dropping rates by 2% to encourage lenders to lend to small businesses.
Unlikely if you ask me since inflation is up & rising."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
mortgages are not based on the BOE base rate.
they are based on LIBOR and SWAP rates.
so even if the BOE cuts doesnt mean mortgages will get cheaper
Look at the last two cuts, mortgages are now MORE expensive than before the last 2 cuts
Just to add to this post.
LIBOR rates are the rates at which banks will lend to each other. These have been increasing whilst the BOE rate has been decreasing.
As long as the credit crunch continues, and latest estimates suggest a great many months as Banks attempt to rebuild their balance sheets, then mortgage rates will remain high despite Central bank rate cutting.
The other thing to consider is that when the BOE cuts rates it stimulates inflation. We could therefore have a situation where, having fought the credit crunch, the BOE is forced to aggressively raise rates to combat the higher inflation it has helped introduce.
Overall I wouldn't count on the mortgage situation improving for a long time yet.0 -
Unless you have a tracker mortgage of course, in which case they are obliged to pass on any cuts in BOE base rate (although they often drag their heels).
Must admit, I'm with the Victor Meldrews above - I just don't believe it.
A lot of building societeies convenienty raise their latest tracker rates days before the BOE meets to cut the central rate. They can then reduce their tracker rates as per the BOE cut - but surprise surprise their overall rate stays the same.0 -
johnycoldears wrote: »A lot of building societeies convenienty raise their latest tracker rates days before the BOE meets to cut the central rate. They can then reduce their tracker rates as per the BOE cut - but surprise surprise their overall rate stays the same.
They only raise their tracker rates for new customers though, it isn't retrospective otherwise there'd be no point in signing up for a tracker.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
!!!!!!_here wrote: »They only raise their tracker rates for new customers though, it isn't retrospective otherwise there'd be no point in signing up for a tracker.
Totally agreed0
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