thebigpicture Posted April 8, 2011 Share Posted April 8, 2011 The first rise I'm sure will be a tentative 0.25% to see how the markets react, they'll have to wait a few weeks to see what the RPI/CPI movement does and by that time they may have wished they'd raised it 1% in the first place. Figures like 0.25/0.5% doesn't look like much of an impact to most, but as above in actual mortgage repayment terms plus any extra hike the Banks will make you could soon by 100 quid worse off with a very small increase. Many have had extra income so far as their mortgage payments have dropped due to low rates, inflation today has robbed them of some of that saving and already its hurting many. The interest rate rises will increase that pain later this year (possibly from May if GDP is up) and if the rise isn't great enough to curb inflation its bad news all round for many. Quote Link to comment Share on other sites More sharing options...
RichB Posted April 8, 2011 Share Posted April 8, 2011 That kind of rate was never offered to people taking out new mortgages so if they were stretched at that level, they must have royally miscalculated somewhere. And yet I know several who are in that very position. Quote Link to comment Share on other sites More sharing options...
thebigpicture Posted April 8, 2011 Share Posted April 8, 2011 And yet I know several who are in that very position. So far we haven't seen an imploding housing market in the UK, yes prices have fallen but not in the way they have in the past. As I said above, many have been protected from pain because their mortgages have reduced so much in the past. Inflation, especially fuel and food has stripped a great deal of that saving from them today, the return of high rates will only increase the financial pressure. Are we now going to see the market getting its guts ripped out as defaults become much more prevalent as the rates rise? there doesn't seem to be enough buyers to snap up the repo's due to stricter lending limits and who's going to buy in a downward spiraling market? A friend of mine said a few years ago "recession? what recession" "I've never had it so good" the reduction in his big mortgage has been so great, he's had more spare cash than ever before. I don't think many of us have seen or felt much of the recession whatsoever in the past 3 years, the rate rises may bring that all to home. Quote Link to comment Share on other sites More sharing options...
Deckard Posted April 8, 2011 Share Posted April 8, 2011 Yesterday I had lunch with a prominent MP (who for obvious reasons will remain nameless) and we were discussing the markets. Now this is a cons MP who knows what's going on, and whilst I was talking about the lack of distressed sellers keeping the stand-off between buyer & sellers, they said that "there were three rate rises already priced in for this year". Believe me, this MP knows the people who know. Are you sure he wasn't talking about JCT and his merry men? Quote Link to comment Share on other sites More sharing options...
bergkamp N4 Posted April 8, 2011 Share Posted April 8, 2011 Jean Claude Trichet! Very good OP your original thread has baffled/amused /perplexed /etc me. For me personally it has been the best and yet strangest post I have read on this site up to now. Anyways you are more than welcome to shout me lunch any wed, thur or fri in Central London and I will tell you anything you want to hear. You can have this as a starter for free- someone high up and in the know has told me ...... we will have a heatwave in late August Quote Link to comment Share on other sites More sharing options...
northwestsmith2 Posted April 8, 2011 Share Posted April 8, 2011 The base rate is so disconnected from the market that it's almost becoming a seperate governmental department for internal borrowing and lending. I'd accept a higher fix when taking out a mortgage because I think base rates will rise past it, so will many others making it pointless from a personal perspective. Quote Link to comment Share on other sites More sharing options...
Guest spp Posted April 8, 2011 Share Posted April 8, 2011 (edited) They need to be at 5% plus. Exactly...the jig is up! We have reached the tipping point. Edited April 8, 2011 by spp Quote Link to comment Share on other sites More sharing options...
Nationalist Posted April 8, 2011 Share Posted April 8, 2011 Sooner or later if the base rate doesn't rise we'll get a sterling crisis - pound collapses, bond markets won't fund our deficit. TBH I'm amazed it hasn't happened yet. Why hold sterling when its value is evaporating? (Hold zloties and you get a REAL return!) Quote Link to comment Share on other sites More sharing options...
thebigpicture Posted April 8, 2011 Share Posted April 8, 2011 Sooner or later if the base rate doesn't rise we'll get a sterling crisis - pound collapses, bond markets won't fund our deficit. TBH I'm amazed it hasn't happened yet. Why hold sterling when its value is evaporating? (Hold zloties and you get a REAL return!) Most are evaporating at the same rate aren't they, rather be in Sterling than Euro's Quote Link to comment Share on other sites More sharing options...
Van Posted April 8, 2011 Share Posted April 8, 2011 Now the ECB has begun raising, Merv has no choice but to follow. Yeah, I reckon May, Aug & Nov provided oil prices don't spiral right out of control and push us back into recession. Either way there's headwinds for the UK property. Quote Link to comment Share on other sites More sharing options...
bergkamp N4 Posted November 24, 2011 Share Posted November 24, 2011 OP I think it would be beneficial to the users of HPC if you named the "prominent MP" Quote Link to comment Share on other sites More sharing options...
Pent Up Posted November 24, 2011 Share Posted November 24, 2011 Now the ECB has begun raising, Merv has no choice but to follow. Yeah, I reckon May, Aug & Nov provided oil prices don't spiral right out of control and push us back into recession. Either way there's headwinds for the UK property. Luckily Merv knew the inflation was coming. So he cleverly refrained from raising rates as he knew full well that the inflation would push us back into recession. Quote Link to comment Share on other sites More sharing options...
'Bart' Posted November 24, 2011 Share Posted November 24, 2011 Now this is a cons MP who knows what's going on Too easy. Quote Link to comment Share on other sites More sharing options...
shipbuilder Posted November 24, 2011 Share Posted November 24, 2011 Yesterday I had lunch with a prominent MP (who for obvious reasons will remain nameless) and we were discussing the markets. Now this is a cons MP who knows what's going on, and whilst I was talking about the lack of distressed sellers keeping the stand-off between buyer & sellers, they said that "there were three rate rises already priced in for this year". Believe me, this MP knows the people who know. I decided not to push any further on this (as our meeting wasn't really about this) and so I don't know if they're 3x rises of 0.25% or 3x 1% so the information is only of partial use (and TBH they may well have to adjust the percentage of each rise depending on the situation at the time). But it's good to know that we'll be looking at a base of AT LEAST 1.25% by December - and maybe a lot more. Of course this will translate into SVRs of 7%+ which will no doubt help the HPC along. I suspect that they'll want to avoid looking like panicking, and do a rise-per-quarter, so I'd expect a .25 rise next month (or the one after at the latest). Mmm. Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted November 24, 2011 Share Posted November 24, 2011 An interesting side effect of the interest rate / qe has been on annuity rates. Some annuity charts here:- http://thisismoney.williamburrows.com/ratetables/key.aspx Quote Link to comment Share on other sites More sharing options...
CrashConnoisseur Posted November 24, 2011 Share Posted November 24, 2011 OP I think it would be beneficial to the users of HPC if you named the "prominent MP" Why? He stated it was a Conservative MP so we already know that they are utterly clueless. Quote Link to comment Share on other sites More sharing options...
bergkamp N4 Posted November 24, 2011 Share Posted November 24, 2011 Why CC? Lots of reasons but for now will list 2 1) Did it happen (the lunch) 2) So that their constituents on HPC are aware and can then decide at election time to relect or give another pompous bullshotter from another party approx 4 years on the gravy train. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted November 25, 2011 Share Posted November 25, 2011 An interesting side effect of the interest rate / qe has been on annuity rates. Some annuity charts here:- http://thisismoney.williamburrows.com/ratetables/key.aspx Yep. Pension collapse (buy BTL for your pension!), plus a crushing blow to companies with pension commitments. Quote Link to comment Share on other sites More sharing options...
aa3 Posted November 25, 2011 Share Posted November 25, 2011 People are finally caving in to the reality I said we were in(after 3 years of kicking and screaming).. we'll never see the base rates rise again. The Japanese are at 20 years on now, and still waiting for those rate rises. It is just the next stage of capitalism.. Japan got there first because they are more efficient and technologically advanced than us. Quote Link to comment Share on other sites More sharing options...
out the loop Posted November 25, 2011 Share Posted November 25, 2011 People are finally caving in to the reality I said we were in(after 3 years of kicking and screaming).. we'll never see the base rates rise again. The Japanese are at 20 years on now, and still waiting for those rate rises. It is just the next stage of capitalism.. Japan got there first because they are more efficient and technologically advanced than us. Yes. Certainly no rises for a long long time anyway. This is how it is going to be and we all had better get used to it. Whether it's right or wrong or whatever the people who control the wealth (and thus the power) in the UK will hold onto it until it is wrested from their cold dead hands. Quote Link to comment Share on other sites More sharing options...
aa3 Posted November 25, 2011 Share Posted November 25, 2011 Yes. Certainly no rises for a long long time anyway. This is how it is going to be and we all had better get used to it. Whether it's right or wrong or whatever the people who control the wealth (and thus the power) in the UK will hold onto it until it is wrested from their cold dead hands. Thats right. To actually write down the debt would mean writing down the value of the bonds or cash in savings accounts on the other side. Those super rich who hold most of that cash and bonds in the country don't want that to happen for obvious reasons. So printing money, trying to prop up the paper value of the assets with 0% interest rates, extending and pretending will go on for as long as it can. Likely until inflation makes it so the nominal amount of the debts is actually payable. Or until systemic collapse. But from the perspective of those who control the wealth, systemic collapse is only equally as bad as writing down their assets so they lose all their equity. Either path sees them losing their position in society. Quote Link to comment Share on other sites More sharing options...
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