Hooray for savings rates cuts
Comments
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veryintrigued wrote: »And then what.....
Gone very quiet.
Maybe you'll then revert to my previous post eh JJ?0 -
Bowl - supposing you were able to evade some of the inflation through different shopping habits than most people, by changing lifestyle
Or supposing inflation then later came down afterwards, leaving a relatively smaller mortgage afterwards
Or supposing the economy improves on time to create pull inflation
Interest rate rise would harm me personally but it'd help a lot of young people trying to buy property0 -
MatthewAinsworth wrote: »Interest rate rise would harm me personally but it'd help a lot of young people trying to buy property
Excellent... weak currency, high inflation and now high interest and mortgage rates, the solution is so simple and all those high falutin' experts can't think of it. :embarasse0 -
So you don't experience the inflation because you somehow avoid buying the goods and services that have gone up in price. And then the inflation rate comes down again so the goods and services are still at their inflated prices but are no longer inflating further. And you are not buying them anyway because you changed your lifestyle to avoid them.MatthewAinsworth wrote: »Bowl - supposing you were able to evade some of the inflation through different shopping habits than most people, by changing lifestyle
Or supposing inflation then later came down afterwards, leaving a relatively smaller mortgage afterwards
Interesting fantasy, but if you have not experienced any inflation, i can't see in what sense you believe your mortgage has been "inflated away"? You do appreciate it only actually goes away when you pay it off, right?
And if that isn't enough, you still like the idea of putting interest rates up to make it more difficult to invest in assets and pay off mortgages?
It must give you a great sense of freedom to occupy a world bounded only by your own imagination rather than reason and logic. I'm really quite jealous.0 -
Talex - the boss of shelter said that low rates were a problem, causing prices to rise. I believe that what you would've previously paid in interest is now all getting added to the price, so under low rates it becomes expense that you cannot avoid (under high rates paying it down was more of an option to make a saving)
Bowl - I'd like to see a bit of wage inflation, I'm hoping that everyone else's spending will help there
I wouldn't pay off early under low rates but if they were to rise substantially it could be worth selling off funds
I could actually still benefit from the higher rates if they harm whatever property I'd upsize to more than they harm me, or if they let me buy equities at a cheaper price due to worse initial outlook0 -
Excellent... weak currency, high inflation and now high interest and mortgage rates, the solution is so simple and all those high falutin' experts can't think of it. :embarasse
Well the experts seem to have run out of ideas.
Inflation has been under target for years now, and the intention of governments is always to inflate away the debt.
An increase in interest rates would obviously increase the strength of the currency, it's a natural consequence.
I think most people have settled into a dogmatic rather than a pragmatic response, keep cutting interest rates, but when these start to get negative then it gets a little harder to do. Raising interest rates to say 2% will have very little impact on business lending, many businesses are paying huge amounts for borrowing now with interest rate at a near zero, analogous to credit cards for example, and the interesting enough example of tying them to base rates when they become near zero.
One of the main reasons for not raising rates was that it would strengthen sterling and so make the uk less competitive, surely there's a little more wiggle room on that front now?0 -
Endowment Mark II.
Remember the fantasy that was the endowment mortgage in the 1980s. High inflation was supposed to be the balm that cures all ills. Your £50k interest only mortgage will be pocket money because the 13% return on your endowment policy will more that outmatch it. Your wage rises will make £50k seem like buying a car. All thanks to high inflation.
If the credit crunch had not happened, the whole debt fuelled western economy would probably collapse in one inflationary inferno soon after any way.
It does present an opportunity to lock in a high annuity rate.
The only problem is, hyperinflation will make the annuity worthless after a few years. Worse, there is no guarantee that annuity providers can survive to pay it any way. So, if I buy £100k worth at 15% annuity in 2018, i.e. £15k a year forever, it will be worth one bunch of bananas by 2030, but the annuity provider had folded by 2025.
I need to start building my Killbot army as soon as possible, to defend myself against the ravening disenfranchised horde. What form of energy to run them on, though? No National Grid to charge them up with in an anarchy. Shale gas?0 -
Why ever buy an annuity when you can buy income funds?0
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bowlhead99 wrote: »So you don't experience the inflation because you somehow avoid buying the goods and services that have gone up in price. And then the inflation rate comes down again so the goods and services are still at their inflated prices but are no longer inflating further. And you are not buying them anyway because you changed your lifestyle to avoid them.
Interesting fantasy, but if you have not experienced any inflation, i can't see in what sense you believe your mortgage has been "inflated away"? You do appreciate it only actually goes away when you pay it off, right?
And if that isn't enough, you still like the idea of putting interest rates up to make it more difficult to invest in assets and pay off mortgages?
It must give you a great sense of freedom to occupy a world bounded only by your own imagination rather than reason and logic. I'm really quite jealous.bowlhead99 wrote: ».
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When I say, "let us know", it is rhetorical - let the others know if you like, but I'm done with this thread.
I knew you wouldn't be able to resist:rotfl::rotfl:0 -
Well the experts seem to have run out of ideas. An increase in interest rates would obviously increase the strength of the currency, it's a natural consequence.
To be serious for a moment, why didn't Japan just increase rates these past 20 years as a solution? BOE reckons even a smallish increaase in rates would push mortgage payers into trouble, obviously spending would reduce and our debt fuelled recovery would be in trouble. The £ collapse is seen as a saviour at the moment for exporters and dollar earners, I doubt the brexiteers in government would be keen to see the £ strengthen and the FTSE turn around?0
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