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No Change For Interest Rates

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This thread is becoming quite the monthly tradition

Up until about a week ago, I had been pretty sure for some months that the first hike would be 5th May.

Well, I was wrong.

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Up until about a week ago, I had been pretty sure for some months that the first hike would be 5th May.

Well, I was wrong.

Me too, until Merv started spouting about rate rises again.

Now they're saying it'll be August.

I think the talk of rates rising is purely to scare punters onto higher fixed rates so that the banksters can rape them harder. They have no intention of raising the BR and cutting into the huge profits the banksters can make from lending - let alone risk someone defaulting and increasing the banksters losses.

Bar stewards.

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You know what, the banks may have priced in rate changes (in other words, just hiked up rates for everyone to make a tidy profit)

I now believe there will be no rate change until 2012 at the earliest.

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Look, fiscal tightening is akin to raising rates. It achieves the same goal, and arguably a lot better than raising rates does.

So as long as the cuts keep coming, rates stay where they are.

So, exhale and unclench.

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No surprise and to be honest rising inflation (excepting last month) and wage stagnation and job insecurity, coupled with higher bank ponzi rates are doing the job anyway..........just look at what rate supposed 'tracker' products are at, not even counting the ski high personal credit rates.

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Up until about a week ago, I had been pretty sure for some months that the first hike would be 5th May.

That negative GDP figure put the kaibosh on an IR hike in May IMO.

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Look, fiscal tightening is akin to raising rates. It achieves the same goal, and arguably a lot better than raising rates does.

So as long as the cuts keep coming, rates stay where they are.

So, exhale and unclench.

Maybe from a macro economic perspective.

But crashes are about market sentiment. IMO it's generally necessary to have bad underlying fundamentals to have a crash, but the crash itself is precipitated by a rapid change in sentiment.

Hikes in interest rates are the only thing I see likely to change the sentiment and start a crash. It's easier for the masses to see that they are going to have to pay an extra £x per month and therefore they have to sell than do an analysis of the fundamentals and decide sellling is the best thing to do.

And for me a crash would be better than a long slow decline (that would come about through fundamentals) because during crashes prices tend to undershoot, and if you can time that (and admittedly it's a big if) then there's money to be made.

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Up until about a week ago, I had been pretty sure for some months that the first hike would be 5th May.

Well, I was wrong.

Me too. I now think it will probably be late 2011, if at all. And going by whats happened to commodities this week. They may be right. If this is the start of a new bear market led by China imploding inflation will fix itself as the second recession takes hold.

Edited by Pent Up

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If interest rates go above 1% at any point over the next 10 years I will be ******* amazed.

In fact, I suspect I could take out a mortgage and repay it in full over the next 25-30 years and the BoE base rate will STILL be below 1%. (SVRs, now that's a different matter.) The base rate has become completely meaningless.

Cue: "I remember when interest rates were 15%". Then you'll also remember when houses cost 3.5 times one salary.

If they reach the dizzy heights of 2% again in my lifetime (I'm in my early 30s) then it might just be enough to give me a heart attack... and if I take a mortgage out today at these prices it will probably finish me off too.

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Hikes in interest rates are the only thing I see likely to change the sentiment and start a crash.

If and when people wake up to the fact that inflation is going to exceed their future wage settlements for most of the rest of their adult lives then that could have the same effect.

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More than millions of defaulting CDSs / MBSs would?

Well I'm not upto speed in this area but here's a link from 2009 on annuities http://www.thisismoney.co.uk/pensions/article.html?in_article_id=493374&in_page_id=6

From this I'd say we could expect falling annuity rates for a number of reasons. Then there's price inflation over the retirement! edit: a policy of near zero interest rates will burn through these things (I think)

The other strand is pensioners who are trying to live of the interest in their savings. As the BOE chap said they'll have to eat into their capital?

Oh yeah don't the BOE have index linked pensions?

Edited by Ash4781

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  • 311 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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