Jump to content
House Price Crash Forum
Monkey

Will The Boe Raise Interest Rates This Financial Year?

Recommended Posts

So its a simple question. Now we are into Q2, will the BoE raise IRs between now and Next April?

ok Carney is being dropped in, but outside forces could force his/the MPC's had in raising them a tiny, tiny bit. I personally think that they will rise between now and April 2014, by how much? not sure but it wont be much.

Share this post


Link to post
Share on other sites

It depends on what happens in the US. When America sneezes, we'll be blasted with wet sticky snot. I personally predict that the Fed will start creeping the interest rate upwards towards the end of this year.

Share this post


Link to post
Share on other sites

Unpopular as my opinion will be I see very little chance of the BOE raising interest rates. They are fanatics. No matter how bad the depression they have caused gets they will remain convinced that low interest rates and creating another bubble is the answer to everyone's economic problems.

Since the BOE seized control over everyone's finances we have had a series of bubbles and busts. The 90s stock bubble, followed by a bust they attempted to prevent with a housing bubble. The housing bubble ended in catastrophe so they created a bond bubble and a depression in an idiotic attempt to avoid the consequences of their own stupidity. There has been no stability since they were given the power to destroy the economy. The BOE's control of interest rates has been a total and utter disaster for the country.

I have no doubt at all they will continue with their cretinous course of action. Best I can tell, right now they are trying to create a position where if interest rates rise even a quarter of a percent all the banks will go bust. That's why they are encouraging banks to lend at zero percent interest rates against massively overpriced assets, instead of telling them to unwind their positions and stop giving out idiotic loans. That way the banks can all go bust, like my bank just has. They will never stop this madness voluntarily.

Share this post


Link to post
Share on other sites

I voted no.

My reasoning is that if rates go up too high too soon (probably just 0.5% or so) lots of people will default killing the UK banks.

I don't think I have an axe to grind on the issue now either. I have just signed up for a 5 year fixed rate at 2.59%, which compares well with my previous 2 year fixed rate mortgage which was 2.54%. By the time the new 5 years is over, I'll be half way through a 20 year mortgage, and so will be much less sensitive to rates anyway and will have made overpayments.

The problem is the 3 million or so on Interest Only. In 5 years from now they will still owe what they owe today. They either need to sell and downsize or the banks will have to keep rates down even then to avoid defaults - especially if new buyers have still been buying at inflated prices.

Share this post


Link to post
Share on other sites

I voted No.

I think it'll be tight though.

Remember we are not talking about normalising rates rather than tightening. At the moment they hould be at about 3% -4%

Add in a spread of about 150 basis points and you get a mortgage rate of ~6% - for a good risk (if one of those exist anymore).

In reality, the banks are suffering with BoE rates lower than their cost of funding - bonds.

Banks can borrow some money at BoE rates - their is always a counter party.

To get anything like the amount of credit they need then they they need to raise credit by selling bonds.

So the future is either:

1) Very little credit; uber low housing transaction.

or

2) Mortgage rate @ 6%

All this when the UK as a whole probably have about 5 years stock untransacted.

Don't let the sales flood drown you.

Share this post


Link to post
Share on other sites

I voted no.

My reasoning is that if rates go up too high too soon (probably just 0.5% or so) lots of people will default killing the UK banks.

With all due respect, the point i was trying to make earlier is that if the Federal Reserve raise interest rates- which they look increasingly likely to do towards the end of this year- then we will have no choice but to follow suit.

Share this post


Link to post
Share on other sites

no

for without a banker in the street, we are nothing. useless. banks are vital and are the difference between cave man and modern man.

At least, that is the view of the banker...and like Nigella, the government has his hands on its willing throat.

Of course, this doesnt mean borrowing will be cheap for the rest of us.

Share this post


Link to post
Share on other sites

I voted no because this country is madder than a box of bi-polar frogs.

Share this post


Link to post
Share on other sites

I voted no.

My reasoning is that if rates go up too high too soon (probably just 0.5% or so) lots of people will default killing the UK banks.

I don't think I have an axe to grind on the issue now either. I have just signed up for a 5 year fixed rate at 2.59%, which compares well with my previous 2 year fixed rate mortgage which was 2.54%. By the time the new 5 years is over, I'll be half way through a 20 year mortgage, and so will be much less sensitive to rates anyway and will have made overpayments.

The problem is the 3 million or so on Interest Only. In 5 years from now they will still owe what they owe today. They either need to sell and downsize or the banks will have to keep rates down even then to avoid defaults - especially if new buyers have still been buying at inflated prices.

B0llocks!! We have an interest only mortgage and are quite capable in paying this off as I expect many others are.

Edited by longtomsilver

Share this post


Link to post
Share on other sites

no

for without a banker in the street, we are nothing. useless. banks are vital and are the difference between cave man and modern man.

At least, that is the view of the banker...and like Nigella, the government has his hands on its willing throat.

Of course, this doesnt mean borrowing will be cheap for the rest of us.

Not a chance unless inflation starts ramping up near 8-10%, more printing yes, just enough to keep a high of 5% if needed.

Share this post


Link to post
Share on other sites

With all due respect, the point i was trying to make earlier is that if the Federal Reserve raise interest rates- which they look increasingly likely to do towards the end of this year- then we will have no choice but to follow suit.

+1

Share this post


Link to post
Share on other sites

It depends on what happens in the US. When America sneezes, we'll be blasted with wet sticky snot. I personally predict that the Fed will start creeping the interest rate upwards towards the end of this year.

The Fed has extended numerous times how long it will keep near zero interest rates. It is currently on hold until at least mid-2015.

Share this post


Link to post
Share on other sites

Nope.

Gavyn Davies here expecting he'll want to move market expectations back out again, and start talking soon about lowering the unemployment threashold down to 6.0 from 6.5

Core PCE is only 1.0%. There is no inflation.

http://blogs.ft.com/gavyndavies/2013/06/16/what-the-bond-market-is-telling-the-fed/

BoE will want to get sterling back down again (it's bounced back up to 1.57) and there's little chance we'll do anything before the FED. Why would BoE want sterling moving higher? Doesn't make any sense at all.

It'll be yonks off, and even then it'll have little impact on mortgage rates due to the massive spread being used to recap the banks.

Edited by R K

Share this post


Link to post
Share on other sites

The Fed has extended numerous times how long it will keep near zero interest rates. It is currently on hold until at least mid-2015.

Changes in interest rates are always "unexpected" ;)

Share this post


Link to post
Share on other sites

I voted no.

My reasoning is that if rates go up too high too soon (probably just 0.5% or so) lots of people will default killing the UK banks.

I don't think I have an axe to grind on the issue now either. I have just signed up for a 5 year fixed rate at 2.59%, which compares well with my previous 2 year fixed rate mortgage which was 2.54%. By the time the new 5 years is over, I'll be half way through a 20 year mortgage, and so will be much less sensitive to rates anyway and will have made overpayments.

The problem is the 3 million or so on Interest Only. In 5 years from now they will still owe what they owe today. They either need to sell and downsize or the banks will have to keep rates down even then to avoid defaults - especially if new buyers have still been buying at inflated prices.

Oh yes - I am surprised to find people who have £2m mortgage from boom years on £3m houses and now earns £200 pretax oddk + the usual (school fees, car, wives) - would think a few percent rise in interest will put them in fair awkward position.

Obviously, as interest goes up, the house price also goes down and it will be double whammy.

But no.. the 0.5% mercy will continue.

Share this post


Link to post
Share on other sites

People keep thinking things will go back to normal.

But it was normal that got us into this mess.

People think that we are in this mess because of the banks behaviour leading up to 2007

I think it would have happened anyway the banks behaviour just brought the day forward.

So we are now six years away from 2007 will you still be blaming the bank in say 20 years from now when all the mortgages taken out in 2007 have been paid off?

Share this post


Link to post
Share on other sites

I voted yes.

I think, they will rise the interest rates by 0.25%, something like warning shot.

The homeowners who are waiting and undecided, will start to panic and remortgaging. Plus all these who do not want to miss Top places on Titanic.

The GDP will increase, coalition will say they fix the economy, raise interest rates again and leave the rest for the next probably labour government to sort it out.

Share this post


Link to post
Share on other sites

What Harry said.

Left to their own devices the bunch of fanatics (an apt word) that comprise the BoE certainly won't raise them but they may have no choice.

So the question for me becomes: will the Fed raise?

Share this post


Link to post
Share on other sites

I voted no, I expect Carney to signal a longer commitment to ZIRP, but, as with others here, I agree that approach will ultimately be curtailled by events elsewhere. Can't see it before Apr '14 though.

One point I've made a few times about Carney is that he will not want to be seen as a one-trick pony, especially if the global environment is markedly different. He could turn into the poster child for aggressive tightening.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 242 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.