Wednesday, Jan 06, 2010
Loading the silver bullet?
Telegraph: Interest rates 'could rise in March'
Signs of an economic recovery and sharply rising inflation could force the Bank of England's monetary policy committee (MPC) to consider raising rates early this year, an analysis by Henderson New Star indicated.
The company's "MPC-ometer" – a statistical tool for forecasting interest rate decisions based on the latest economic and financial indicators – predicts that the MPC will shift to a "tightening bias" in early 2010.
The MPC-ometer has a good record of predicting the Bank's decisions on interest rates. It has correctly signalled the month and direction of 12 out of 13 rate movements over the past two and a half years.
Posted by dill @ 03:44 PM (1816 views) Add Comment
12 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. will said...
Nice for those in cash.
2. mystie010 said...
I've been saying that rates would rise around Feb/March time for a long time now. I'm just working off gut feeling and nothing else. I hope rates do rise and then I might get a decent return on my hard earned cash. Rates have been far too low for too long. I hope these guys are right.
3. fallingbuzzard said...
I've long forecasted a pre-election hike as proof of recovery for Gordon. Dead cert
4. will said...
Will the banks pass it on to thier customers and by how much?
5. will said...
And I thought the Bank of England set the rates. Usually.
6. hpwatcher said...
I can only see them rising a negligible amount, not enough to save Sterling and the UK economy.
7. alan_540 said...
Yeah baby! Bring it on! Can't wait.
8. titaniccaptain said...
I have eaten into 3/4s of my savings in the past 2 years :(..........so I won't be there to enjoy the rewards of higher interest rates.
9. matt_the_hat said...
7. alan_540 - don't get too excited IR are only going up because of inflation - your very own allocated indebted master (usually referred to as home-owner with large mortgage) will still be sucking you dry to pay their mortgage - have a nice evening
10. jack c said...
This from todays moneyfacts breaking news
SVR increases gather pace
The historic low 0.5% Bank of England base rate has done nothing to abate rises in mortgage providers' standard variable rates (SVR), research conducted by Moneyfacts has revealed. Eight mortgage providers have increased their SVRs since the measure was slashed in March last year. They include: Nationwide BS, Skipton BS, Ipswich BS, Scottish BS, Cambridge BS, Accord Mortgages: Marsden BS, and Mansfield BS. "There is little or no incentive for borrowers, particularly those with little or no equity, to find a new deal when in all likelihood they will have to pay a higher rate," commented Darren Cook, spokesperson for Moneyfacts Group. "By increasing the SVR, lenders are actively trying to encourage borrowers to find a new mortgage deal, but many are unlikely to act until a significant base rate increase is a real possibility. The momentum to increase SVRs appears to be gathering pace and now that a few have taken the step, it is highly possible that others will follow." The highest SVR at present is 6.45% from Chesham BS. There are, however, a number of lenders that have reverted to SVR rates as low as 2.50%, including Cheltenham & Gloucester, Cheshire BS, Derbyshire BS and Lloyds TSB Scotland. "Remaining on a SVR is an attractive option for many," added Mr. Cook. "The latest remortgage approval figures continue to show record lows as borrowers continue to stay on a revert-to rate, rather than move onto a new deal."
Source www.emoneyfacts.co.uk/news/breakingnews.aspx?newsarticleid=192032
11. alan_540 said...
I agree Matt. But at least higher returns on my savings helps offset the fixed rate mortgage until I can totally repay it. After which I can start enjoying my salary (albeit in devalued sterling courtesy of Brown & Co.)
12. jack c said...
Another article from today's Moneyfacts
Property owners foresee 2010 base rate rise
Category: Mortgages
Date: 1/6/2010
Property owners foresee a slight rise in the cost of borrowing over the next 12 months, with three in four expecting a rise in the base rate of interest.
The latest Young Index shows that 76 per cent of respondents expect the Bank's rate to be higher than it is now (0.5 per cent) by the end of 2010.
While the measure is expected to rise, there is little expectation of major movement. Only six per cent of respondents think it will have risen to more than two per cent, well below the long term average of five per cent.
"Certainly in the short term, the Bank of England's Monetary Policy Committee is unlikely to make any significant change to the base rate," Young Group's chief executive officer, Neil Young concurred.
The average base rate expectation for the fourth quarter of 2010 is 1.1 per cent – just 0.6 per cent more than it is at present.
Other headline results from the survey included 99 per cent of landlords intend to hold onto their residential property investments over the next 12 months, while just under half (49 per cent) said they planned to do so for the next decade.
There also seems to be growing sentiment that the property market recovery is gaining greater pace in London compared with the rest of the UK.
Fifty-nine per cent of landlords said they were considering purchasing property in the capital in 2010. Less than half (43 per cent) planned to look at other opportunities in the UK outside London.
Furthermore, 76 per cent of respondents predicted rising property values in the capital, compared with 60 per cent who said the average price of a home would go up in the rest of the country by the year's end.
Earlier this week, the Royal Institution of Chartered Surveyors said it expected an increase in the base rate in the second half of this year.