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It's the almost impossible to answer 'correctly' question, there are so many arguments both for and against and I won't be surprised eitherway.

That said, I think they're more likely to remain low than high, the only thing that'll cause an increase is a run on the pound imho, the BoE has turned a blind eye to that inflation stuff!

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Two year fixed rate bond at 6.3% maturing with Halifax

Their best offer for the same again is 2.75%

What a fecking world...

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My apologies...

Content of FT news item:

Inflation concerns trigger pound rally

By Neil Dennis

Published: June 14 2010 11:42 | Last updated: June 14 2010 17:40

Sterling climbed on Monday after comments from Bank of England officials over the weekend highlighted concerns that inflation could stay higher for longer.

Andrew Sentance, who sits on the Bank’s interest rate-setting monetary policy committee, said inflation had been resilient against pressures from unemployment and weakening consumer confidence, contrary to the MPC’s belief that spare capacity in the economy would bring prices down.

“There must therefore be a high degree of uncertainty about its future impact,” he told the Sunday Times. “This highlights the issue of how long expansionary policy will remain appropriate.”

Alistair Cotton at Currencies Direct said: “Mr Sentance suggested rates may rise as early as the second half of the year. Sterling is performing strongly . . . on the back of this news.”

Investors also welcomed the news that state borrowing would fall more quickly than expected, the first findings of the newly created Office for Budget Responsibility. This offset the impact from the OBR’s other announcement – that economic growth would be slower than forecast by the previous administration.

“The market is reacting favourably to these data given the borrowing numbers are improved, offering more comfort that the UK can work its way out of its fiscal problems,” said James Knightley at ING.

Sterling hit a month high against the dollar, up 1.6 per cent to $1.4777. Against the yen, sterling was up 1.9 per cent at Y135.84.

The pound climbed 0.4 per cent to £0.8296 against a stronger euro, but the single currency made up ground elsewhere in a trading environment that continued to favour risk.

Having fallen to a four-year low of $1.1875 a week ago, the euro climbed to its highest level in eight sessions. It was up 1.1 per cent against the dollar to $1.2242 and climbed 1.4 per cent versus the yen to Y112.49.

South Korea announced trading curbs on currency derivatives on Sunday. The won has had a volatile run since the measures were first mentioned in the Seoul press last week. It gained 2 per cent to Won1,221.20 to the dollar on Monday on relief there were no nasty surprises.

The dollars of Canada, Australia and New Zealand were all stronger against their US counterpart. The loonie gained 0.7 per cent to C$1.0258, while the Aussie climbed 1.6 per cent to $0.8636 and the Kiwi added 1.4 per cent to $0.6992.

There were some strong performances against the dollar among the currencies most geared to raw materials’ exports as prices on commodity exchanges rose.

“The improvement in the risk backdrop led to broad-based dollar weakness an

Edited by Flatdog

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Even if they upped them now, it's a few years too late.

We're doomed whatever they do.

I believe there may be one or two token rises but that interest rates will stay very low (<2%) for 5 year.

I am putting my money where my mouth is and sticking with my tracker although even severe interest rate rises would still allow me to pay the mortgage.

I just don't think the sheeple can cope with rates much higher. Of course if rates did go up house prices would have a major crash which would be nice because I really want to buy a nice house with a large plot of land in an expensive area in the next few years - although it remains to be seen if nice houses will actually drop much in price (I haven't seen any)

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I believe there may be one or two token rises but that interest rates will stay very low (<2%) for 5 year.

Agree that any rises for late 2010/ early 2011 are likely to be small. After that I have no clue.

I'm surprised anyone feels they can make a 5 year prediction on anything at the moment. :unsure:

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Well fuel and taxes are going to rise, and likely imports as the Chinese try to feed their internal economy by increasing wages. Everything else is linked to fuel. So even if banks rates stay the same, everything else will go up IMO. It will be harder to pay your mortgage even if it doesn't increase. That also implies jobs have to be lost as people's money buys less things..isn't that something to do with interest rates?

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I was of the view that there would be moderate rate rises in 10/11. Events have changed that view and I think that rates are low for 10 years. Just look at the state of the US economy, let alone the EU - and China. Big whammy depression still coming. Buy things that hedge against interest rate rises rather than price inflation.

Edited by fallingbuzzard

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Well fuel and taxes are going to rise, and likely imports as the Chinese try to feed their internal economy by increasing wages. Everything else is linked to fuel. So even if banks rates stay the same, everything else will go up IMO. It will be harder to pay your mortgage even if it doesn't increase. That also implies jobs have to be lost as people's money buys less things..isn't that something to do with interest rates?

Yes, it's called inflation. Which we will get for the reasons you state - we're a net importer of all the stuff we actually need.

That causes the inflation rate to rise, rigged though it is.

Which causes interest rates to rise.

Normally.

However, the game being played is the threat of deflation, that in itself being enough to debauch the currency by undervaluing the base rate.

It's a tight line / game to play which the BOE will lose control of eventually. The hope there is simply that other countries lose it worse than we do.

It's endearing that major economists have time-honoured theories about slack in the economy keeping inflation low, and imagining that prices can only rise to what people can pay for them, that being another check on inflation. But that doesn't apply to basics, it applies to discretionary purchases.

I also agree with you that the factor being overlooked is rising costs - people might well look back at the 1970s - the period which bought a large chunk of our parents' houses for them via the mechanism of wage inflation - and think that's what we're in for.

We might be. But wages are deflating. I suspect actually all that's going to happen is that the cost of basic essentials will rise inexorably to the point where 100% of peoples' * incomes go on the mortgage and basics leaving little or nothing for discretionary spending in the economy.

Read Blanchflower and Katetsky - what will happen is the opposite of that they say, every time.

--

* Morons who over-committed themselves. But then, markets are set by the margins, not the majority.

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CB rates low for a long time.mortgage rates higher from here for a long long time,until the banks ahev rebuilt their balance sheets in 20 years time(if they still exist)

Yup, CB rate won't move but that doesn't matter a jot. 5 yr rates to power up.

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Just wondering if anyone on here has any opinions as to when, or if, interest rates will rise.

If all goes to plan: BR

2010 0%

2011 1%

2012 2%

When things start to get better, more debt repaid the rates can then increase slightly.....if the economy suddenly deteriorates rates could suddenly increase to stabilise...will have to wait and see, anything could happen, nothing would surprise. ;)

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i dont think it matters where IR are,

it depends what the bank are lending at, a poster on another thread said he was offeered business loan at 12%

and most personal loans are 8%

so i think it does not matter, although i do not kow much :lol: and also i dont care much anymore

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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