0.25% cut in BoE base rate

WTF?_2

Gorgeous_George wrote: »

This helps all homebuyers and renters alike.

Houses will be cheaper because of the credit crunch and all homebuyers, now and in the near future will enjoy lower mortgages as a result of today's cut. Landlords' cost will be curbed and the upward pressure on rents eased if mortgage rates are lower.

GG

It's all very well if you see a marginal benefit from this cut - I take it you are on a tracker mortgage - but plenty of people still on fixed rate mortgages won't see a bean of benefit and SVRs are unlikely to go down by much, if at all.

On the other hand the pound has been plummeting (even more) on the foreign exchanges as a result of this cut which will put upwards pressure on prices. Food, energy - all could be costing us more and more.

Given that inflation is already strong I would guess that this will make it even worse. We risk ending up in an inflationary recession as per the 70s but without the wage rises. This policy of cutting rates in the teeth of strong and rising inflation has the potential to make us all a lot poorer - including the very people it is supposed to be helping.

The public has been conned into thinking that stupidly high and ever rising house prices are a good thing and that low interest rates are the way to defend them and therefore also good. These rate cuts are there to help the banks make more cash and recover their losses - nothing to do with 'helping' the public and the effect will be almost certainly the opposite.

adr0ck

Al_Mac wrote: »

You want to give me money

no you want to give me money as your so super rich that £350 to you is like what 2p is to me

thanks for the cash in advance

WTF?_2

chinatown wrote: »

For your info our mortgage is almost half of that amount. And the last cut of 0.25% cut it by £30 and we've been told it will be the same again. And £7.50 a week does matter to some people! And whilst youre ranting on about people 'so willingly borrowing other peoples money' how many people do you know who actually own their homes outright? Im guessing only a few. Majority of people who have a mortgage be it a new one or one with only a year left to go, are still 'borrowing' other peoples money!

Some of us haven't borrowed to the point where we are so up to our necks in debt that 7.50 quid a week is the difference between financially sinking or swimming.

In fact, some of us actually have things called 'savings' and as a result of interest rate cuts aimed at bailing out the banks who made stupid loans (and cheered on by the financially illiterate that did the borrowing) are going to see our returns eroded even more.

Plus, since we are in an environment of growing inflation the interest rate cuts will have the effect of worsening this ... further attacking our savings. And also incidentally making everyday stuff like food, heating your house and driving a lot more expensive.

Many people may well find that they are worse off in a month or so's time if they actually have the braincells to sit down and do a statement of accounts.


If you borrowed massive amounts of money wihtout doing your sums first, to the point where 7.50 a week now matters to you then you have zero sympathy from me.

The people who do have my sympathy are those on the breadline through low incomes who face spiralling food and heating costs.

pamaris

!!!!!!? wrote: »

We risk ending up in an inflationary recession as per the 70s but without the wage rises.

I wondered if you could clarify to me why we won't get inflationary wage rises if every other aspect of inflation is out of control. Is this simply because of recession- the bosses will watch their bottom line?

poppy10_2

oneandonlyboy wrote: »

Most lenders wont pass on the cut.

Most of them have already passed on the cut today - including Halifax, Nationwide, Bank of Scotland, Barclays, Britannia, Lloyds TSB, Cheltenham & Gloucester, First Direct and Woolwich.

The trouble is, they were all hiking their rates last week in anticipation of today's cut, so we've ended up back where we started,.

WTF?_2

pamaris wrote: »

I wondered if you could clarify to me why we won't get inflationary wage rises if every other aspect of inflation is out of control. Is this simply because of recession- the bosses will watch their bottom line?

Where will the money come from?

* We have a huge pool of freshly arrived immigrant labour from poor countries who will be quite happy to undercut Brits in any job that they can do.

* Britain no longer is a major exporter and now the balance of trade is massively towards imports, including food imports. Less export activity means fewer businesses that can benefit from a devalued pound to offset having to pay their workers more.

* Globalisation means that you are always competing against foreign labour. We've seen a movement towards offshoring, british workers demanding higher pay is going to increase that trend. Even a weaker pound won't offset that. If a service job can be offshored, or industrial production shifted abroad to save money then it will be.


* When the recession hits there will be a wave of unemployment anyway, workers will be in no position to force rises out of their employers.


In short, we are about to see a very sharp correction to our standards of living. Listen carefully to political pundits on the subject of the economy in the coming year or two. More and more we are hearing the words 'falling standard of living'. This is inevitable in a world driven by globalisation and a race to the bottom. We've had the benefits in the last few years and now it's time to face the bad side.

kingkano

adr0ck wrote: »

still sounds like a lot of money to me

if anyone thinks £350 is nothing i will readily accept any cash donations

I agree. People are boiling this down to '£7.50 per week'. Actually its equivalent to a £500pa raise on your salary. I imagine quite a few people on here would think that worth having. Obviously £7.50 a week sounds like its hardly alot at all unless your struggling (although I argue any sum is worth you having rather than the mortgage company). But it's a 2% raise for the average salaried employee....

sadly I don't benefit at all. fixed rate mortgage and plenty of savings. fingers crossed banks are still desperate for my money and I can tie up a fixed rate for it all next week!

Gorgeous_George

MarkyT and !!!!!!

People will benefit either by rates not rising as much as they otherwise would or by them falling.

GG

DaveyDave_3

Down is the wrong direction. The Bank of England is meant to be controlling inflation with interest rates. Not pandering to the mis-led majority who have borrowed too much over the last 5 years.

This move will merely fuel house price inflation (or at least hold it up) and delay the enevitable crash. In the meatime, inflation will rocket. Even by the ridiculous CPI measure, inflation is 0.5% above the target of 2%. Seems like those that have saved rather than borrow will get shafted (as usual). It's far more profitable to follow the sheeple into a debt-ridden existence.... there'll be tears!.

WTF?_2

Gorgeous_George wrote: »

MarkyT and !!!!!!

People will benefit either by rates not rising as much as they otherwise would or by them falling.

GG

People who have taken large amounts of debt on will benefit from the cuts.
- Whether or not it will offset increased cost of living for them is unclear. I guess the more in debt they are, the more they will 'save'. So those who really borrowed up to their eyeballs will see the most benefits.

Those of us who have savings or a balanced budget most certainly will not benefit.
Quite the opposite in fact, and we'll suffer equally from rising living costs as a result of inflation growing.