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miles2home

Interest Rates.......going Up?.....when?

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I always love to come on this site and read comments which are very informative. Just wondered what you folks think about interest rates in the UK??? Any signs of them rising soon?? we are stuck...we have funds to purchase a property, but want to hold off just incase they drop some more. So we have spare funds in savings accounts giving 3.3% at best.

Be nice to hear what all your thoughts are on this one??

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I have contact B&W and quoted the following from the Banking Code 13.3:

"If we cannot help you, we will explain the main reason why if you ask us to. We will give you this, in writing or electronically, if you ask."

Managed to speak to the underwriters manager, who has now overturn the decision and has re-instated the application, due communication issues.

Halifax told me today that lending rates have gone up, and they have a 5% regular savings (up from 4%). There was a post yesterday suggesting that the UK would be the first of the western countries to start raising rates due to inflationary threats (however that is clearly baloney as austrailia has already started doing it)

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Going up to what though?

1%? That would be a 100% increase.

1.5% would be a 200% increase......

Can the economy sustain those sorts of increases?

100% increase?...easily affordable MR Bull.

anyone think banks might maintain their margins? could never happen...they wouldnt allow it!

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Going up to what though?

1%? That would be a 100% increase.

1.5% would be a 200% increase......

Can the economy sustain those sorts of increases?

100 and 200 are irrelevant. It's 0.5 and 1% absoulte increases to Joe Piublick

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I always love to come on this site and read comments which are very informative. Just wondered what you folks think about interest rates in the UK??? Any signs of them rising soon?? we are stuck...we have funds to purchase a property, but want to hold off just incase they drop some more. So we have spare funds in savings accounts giving 3.3% at best.

Be nice to hear what all your thoughts are on this one??

buy gold & some silver with about 80% of your str fund.

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Part of me thinks 9 months before the BoE base rate goes up. When it does I expect it will be relatively steep, taking 12 -24 months to reach +4%. Take a look at the BoE's website on yield curves which (apparently) foretell the future on this.

The bond auction thing may be a red-herring. I understand (read somewhere) that Japan have been flogging their debt (admittedly much less of it) for the last couple of decades without any problems from their ZIRP and zombie banks. I know little about this topic but assume that large institutional investors will take more than the current incompetents (Labour) to put them off buying debt from a G8 nation - even one as screwed up as ours.

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I always love to come on this site and read comments which are very informative. Just wondered what you folks think about interest rates in the UK??? Any signs of them rising soon?? we are stuck...we have funds to purchase a property, but want to hold off just incase they drop some more. So we have spare funds in savings accounts giving 3.3% at best.

Be nice to hear what all your thoughts are on this one??

I posted here on a similar theme

http://www.housepricecrash.co.uk/forum/ind...t&p=2020438

Key graph is here

http://www.bankofengland.co.uk/statistics/yieldcurve/

Also the data at the BBC is normally reliable:

http://newsvote.bbc.co.uk/1/shared/fds/hi/...ilt/default.stm

but at the time of posting it is showing a yield of 5.65% for Dec 2009, so unless base rates jumped from 0.5% to 5.5% without it being announced on the news, then I think they have temporary calculation error!

edited to add Bloomberg's data

http://www.bloomberg.com/markets/rates/uk.html

Oddly enough, the BoE didn't just pump rates up by 1000%

Edited by Optobear

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I posted here on a similar theme

http://www.housepricecrash.co.uk/forum/ind...t&p=2020438

Key graph is here

http://www.bankofengland.co.uk/statistics/yieldcurve/

Also the data at the BBC is normally reliable:

http://newsvote.bbc.co.uk/1/shared/fds/hi/...ilt/default.stm

but at the time of posting it is showing a yield of 5.65% for Dec 2009, so unless base rates jumped from 0.5% to 5.5% without it being announced on the news, then I think they have temporary calculation error!

edited to add Bloomberg's data

http://www.bloomberg.com/markets/rates/uk.html

Oddly enough, the BoE didn't just pump rates up by 1000%

thanks alot all for this information. Still don't know whether to buy or hold off !!!! so stressful.

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What about copper? ;)

I agree. Holding a few bits of Gold and Silver myself, I decided to add a few bullion of copper. Just for the aesthetic effect. Got a few good deals on eBay (£5/oz).

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buy gold & some silver with about 80% of your str fund.
The base rates will hit 1% in about 20 years.

And there is HPC.co.uk and the dilemma in a nutshell! :lol:

That chart shows inflation (I think it's RPI???) over the next 5 years expected to average about 3%pa.

Not sure how to deduce the interest rate from that, since it all depends what the government set them as a target. If I was borrowing £175bn pa i might set a target of 15% :ph34r:

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stop being a smarty pants winkie. ;)

I like copper only for the simple reason you can do more with it, the colour is nice, and it is always good to be different. ;)

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And there is HPC.co.uk and the dilemma in a nutshell! :lol:

That chart shows inflation (I think it's RPI???) over the next 5 years expected to average about 3%pa.

Not sure how to deduce the interest rate from that, since it all depends what the government set them as a target. If I was borrowing £175bn pa i might set a target of 15% :ph34r:

No, it shows the market priced yield on gilts, and that is a little higher than base rate, so it effectively shows the market expectation of future interest rates. The yield curve was very accurate on the way down (at least until the cut to 0.5% to stop the banking system imploding). It is very hard for the BoE to ignore the market consensus for yield. Hence we can probably expect it to be the best indicator of government action. As to whether the government set the rate, or the market demands the rate of the government, I don't think matters.

To an extent it also shows inflation expectation, in so far as the market demands a real return. Importantly it doesn't show rampant inflation occuring, also it doesn't show interest rates staying at the lows we enjoyed over the last 5 years. If BoE base is up to 5% then mortgage rates will be hovering around 8%. Those interest only mortgages at 6 times salary won't look so clever then!

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No, it shows the market priced yield on gilts...Those interest only mortgages at 6 times salary won't look so clever then!

Oh THAT one!! I was looking at the "Implied Inflation" chart.

Not sure 6x salary IO mortgages ever did look clever.

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