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Bank Of England To Reduce Interest Rates To 0.25%

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Have I missed something?

666bcj.jpg

Accord to the Express, the BoE will lower IRs to 0.25% (you need to download the pic and zoom in as the story isn't on their site yet.)

Speculation from "city traders" apparently.

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"City traders are already speculating that Bank policy makers will halve the current 0.5% rate within the next 6 months in a bid to kick start the economy and experts say that this could benefit all homeowners.

Kevin Mountford, head of banking at MoneySupermarket.com said 'the likelihood of a base rate cut is greater now. It will bring benefits to borrowers if passed on'."

That poor economy of ours. We're kick starting it so much, it must be black and blue!

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Damn, not quite fast enough! :lol:

It's not like me to be quick either :P

Anyway, yours is a far better picture, I can actually read what the article says now. I just wonder which 'City Traders' gave them this information?

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Rightmove asking prices have just been released and they are down... They're trying to balance that bad news (bad news for them)

Well "houses rise by £xxx" is the default housing related headline for the Express. If that's denied them.....

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It's nice they are offering a "free loaf of bread" for every reader! :o

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CHRISTMAS HAS COME EARLY.........

15.08.11, 6:21am

Monday morning.

Could there possibly be a better headline?

That you to The Express for making my day yet again.

Lowing interest rates would be a great move. Home owners need spending power. Simple.

This will get the economy moving and everyone knows it.

Houses will start selling now. I just worry first time buyers will be priced out if they do not buy now. For sure it will be a sellers market soon.

• Posted by: Sibley • Report Comment

OK, the comment is funny because it was written by Sibley, but if this level of economic sophistication is widespread among house sellers and buyers then he could just prove correct.

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"City traders are already speculating that Bank policy makers will halve the current 0.5% rate within the next 6 months in a bid to kick start the economy and experts say that this could benefit all homeowners.

Kevin Mountford, head of banking at MoneySupermarket.com said 'the likelihood of a base rate cut is greater now. It will bring benefits to borrowers if passed on'."

That poor economy of ours. We're kick starting it so much, it must be black and blue!

Cannot see this happening myself but am expecting more QE, who knows, maybe we'll get both. Once your credibility is totally shot then there is no reason to restrain yourself anymore! :)

Got to love the Express and their warm cosy housing stories :rolleyes:

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It's nice they are offering a "free loaf of bread" for every reader! :o

Perhaps they should make it a free wheelbarrow?

Cannot see this happening myself

Seems unlikely to me too. I know the MPC clearly don't give much thought to their economic credibility anymore but an IR cut....

But I'm forgetting. According to Merv, inflation will come down "sharply next year".

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Far from me to query the logic of a prestigious news outlet such as the DAILY EXPRESS but....

- Given that 4 years ago economists were speculating interest rates of 7% and there was good mortgage availability then, and now we have rates 1/14th of that at 0.5% and you need a bucket of cash for a deposit, good credit history and a sprinkle of fairy dust to get a mortgage at present, would it not be fair to say that banks aren't exactly 'fighting' for our mortgage custom right now?

- Driving interest rates down from 5.5% to 0.5% makes a big difference to repayments. Dropping it by 0.25% isn't going to make much difference. I read somewhere that 1% interest rate increase results in £100 rise in mortgage repayments per month per £100,000 owed. Lets say you want a £100,000 mortgage as a FTB (for simplicity). That drop is going to save you £25 a month. Not a life saving amount, even if you're on the edge.

- Banks are not likely to want to lend money below inflation. For some they already are, but only as a means of meeting their balance sheet requirements. They might as well buy rocks and sell them when they want their money back than lend at below inflation rates.

- Isn't more money printing far more attractive to the BoE/the government?

The books don't balance for the UK or the US or the majority of Europe. There's only two ways out of that: One is default of some kind (QE or failing to pay up on bonds). The second is to reverse the trade balance in our favour, whilst simulateously reviving our manufacturing industry to meet those needs and shifting the attitudes of the UK/US/Eurozone to consume less and the rest of the world to consume some relatively over priced luxury goods from us. I think multiple default through QE and some kind of 'reset' which allows us to continue to continue to consume more than we produce. And we might well get away with it because the world is corrupt and we can line the pockets of the rich few in the far east.

Graham

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Everyone with half a brain including Merv and comedy Dave knows rates should be higher than they currently are.

The only reason they are not is because of the Armageddon it would cause in the housing market and the damage that would do to the fragile banking sector.

The Express is not fit to be ar$e wipe! I don't expect them to be cut anytime soon.

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Also mentioned in the "Today" programme this morning. Despair.

My friend owns a mortgage broker company. Their business survival depends on interest rates increasing over the next six months as nobody is currently remortgaging. Not a good day for that industry if interest rates drop.

(just to note they never did liar loans which is also a reason they are struggling now!)

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If they drop interest rates to 0.25% the last thing homeowners would be thinking about is saving £25 on the mortgage. Doesnt really make much difference without a job.

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What about the millions of savers? What about the cost of imports? What about the cost of foreign travel? They all go up. Morever its one last step towards the BoE having no more weapons in its arsenal.

Yeah! Joy for millions of homeowners! They're completely immune from these problems, living in their comfy little home-ownery enclave, aren't they?! Yeah!!

<_< :angry:

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They won't drop it.

You would save around £25 per month on your Mortgage IF the banks pass it on which is unlikely. Your monthly bills would rise more that £25 due to the inflation caused by the weakened exchange rate.

The MPC committee are painfully aware of this and that is why they sit on their hands month after month doing nothing because doing nothing is precisely the right option for them.

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Did Sir Mervyn (all hail the) King in some speech last week say something like "No reason for rates to be where they are now"? If so, has that prompted the hopes for a cut?

Certainly there is no reason for them to be where they are now as they are doing more harm than good, and should be around 5 to 6 %

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  • 334 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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