Jump to content
House Price Crash Forum
silver surfer

No Interest Rate Rise Until July 2016

Recommended Posts

Or so says The Telegraph, quoting Capital Economics,

http://www.telegraph.co.uk/finance/personalfinance/interest-rates/11032396/Interest-rates-predictions-When-will-the-Bank-Rate-rise.html

Whether the inevitable rise comes in December 2015, July 2016, or March 2017 isn't really the point, the more important thing is that ultra low bank rates of 2% or less could easily persist for years and years and years. I'm struggling to see how bank rate can get back to anything approaching normal before the next recession hits and rates come tumbling down again.

Share this post


Link to post
Share on other sites

Bankers robbing the workers and the savers through their low interst rate scam now....why would they force up rates.

they wont do anything till something collapses or they are forced to but with so much VI in housing now the chances of that is zero.

it's collapse then.

Share this post


Link to post
Share on other sites

They (whoever "they" are) were never ever, ever, ever, going to elect to raise rates.

It will have to be taken out of "their" hands.

Tis the new belief systeme in Olde Englande my lorde.

Share this post


Link to post
Share on other sites

FWIW my view (which is irrelevant) is Never w/in reason.

Caveat: the liar c bankers may have to raise once or twice to save face but then bring down to zero v quickly.

#turningjapanese
#disinflation
#deflation

Edited by Killer Bunny

Share this post


Link to post
Share on other sites

Or so says The Telegraph, quoting Capital Economics,

http://www.telegraph.co.uk/finance/personalfinance/interest-rates/11032396/Interest-rates-predictions-When-will-the-Bank-Rate-rise.html

Whether the inevitable rise comes in December 2015, July 2016, or March 2017 isn't really the point, the more important thing is that ultra low bank rates of 2% or less could easily persist for years and years and years. I'm struggling to see how bank rate can get back to anything approaching normal before the next recession hits and rates come tumbling down again.

Assumes theres no change to the inflation target, or nominal gdp targetting or some similar policy change. Even if they stick with current regime they can reverse their macro pru policies (isnt that the point of counter-cyclical macro pru?!) or more intervention for specific sectors such as housebuilding or credit easing for small businesses etc.

Depends to an extent also on the source and scale of the next recession. Likelihood is it wont be as severe as the last one else last one wasnt a 1 in 100 year event.

Thats just monetary policy - then we need to consider fiscal policy - the lever that was purposefully put beyond use the last 5 years with such wasteful consequences.

Share this post


Link to post
Share on other sites

Economists can pronounce on the future as much as they want. But Futures (the market) says end 2016

Market is always wrong. Everyone knows that.

Share this post


Link to post
Share on other sites

So where are we in the recessionary cycle - or are such things no longer relevant in the new normal? It used to be:

RECESSION...

Year 1. Streamlined/starved companies and construction/retail gradually shuffle into life

Year 2. More jobs created

Year 3. Growing confidence, people spending more

Year 4. Salaries/prices rising, inflation suddenly kicks in

Year 5. Bloated companies start to crash, unemployment, retail tanks...

RECESSION

Share this post


Link to post
Share on other sites

So where are we in the recessionary cycle - or are such things no longer relevant in the new normal? It used to be:

RECESSION...

Year 1. Streamlined/starved companies and construction/retail gradually shuffle into life

Year 2. More jobs created

Year 3. Growing confidence, people spending more

Year 4. Salaries/prices rising, inflation suddenly kicks in

Year 5. Bloated companies start to crash, unemployment, retail tanks...

RECESSION

Zombie Nation - Kernkraft 400:

Share this post


Link to post
Share on other sites

breaking news 2015

No Interest Rate Rise Until July 2016

breaking news 2016

No Interest Rate Rise Until July 2017

breaking news 2017

No Interest Rate Rise Until July 2018

breaking news 2018

No Interest Rate Rise Until July 2019

breaking news 2019

average london houses prices £3000000

breaking news 2020

mass emmegration by young and poor , suicides increase by 80%

banks and elderly celebrate record profits

Edited by longgone

Share this post


Link to post
Share on other sites

Looks like the bump every month base rate thread will last another 18 months.

Whilst we are borrowing £100bn a year interest rates won't be going anywhere.

I think that's the reason why IR will go up.

Share this post


Link to post
Share on other sites

I think the sheer size of the debts is exactly why they won't go up. Well, not much at least.

If interest rates are the monetary policy transmission mechanism for the Bank into the economy, then the size of the debts make the economy and credit creation incredibly senistive to changes in rates. And the absolute level of course.

But thats not all IR are though. The BoE is not fully in control of IRs.

IR+exchange rate are the mechanism by which creditors beat up governments.

Share this post


Link to post
Share on other sites

Economists can pronounce on the future as much as they want. But Futures (the market) says end 2016

the market will have many opportunities to change its mind before end 2016..what was the market prediction about higher rates in 2008, 2010, 2012, 2014.. I am sure all those market predictions were correct to a t

Share this post


Link to post
Share on other sites

Looks like the bump every month base rate thread will last another 18 months.

Whilst we are borrowing £100bn a year interest rates won't be going anywhere.

Forgive my slight ignorance but I believe the international market determines the cost at which we borrow. Yields reflect the risk they see in the UK. In other words, I don't (or didn't, feel free to correct me) believe that base rates could entirely control our borrowing costs (bond yields).

Look at Greece, their borrowing costs (bond yields) are immense but their central bank (ECB) base rates are what, 0.25%? They only survive because the ECB and IMF are issuing them emergency loans at low rates.

Now, it is true that the BOE can just QE and buy government bonds at low rates, in the same manner as the ECB is doing for Greece. Is that way you guys mean?

Share this post


Link to post
Share on other sites

I think that's the reason why IR will go up.

Too funny. So we have huge borrowings and the interest charge is huge (oh to be a banker).

So THAT is why rates will rise. Oh for goodness sake.

Share this post


Link to post
Share on other sites

Or so says The Telegraph, quoting Capital Economics,

http://www.telegraph.co.uk/finance/personalfinance/interest-rates/11032396/Interest-rates-predictions-When-will-the-Bank-Rate-rise.html

Whether the inevitable rise comes in December 2015, July 2016, or March 2017 isn't really the point, the more important thing is that ultra low bank rates of 2% or less could easily persist for years and years and years. I'm struggling to see how bank rate can get back to anything approaching normal before the next recession hits and rates come tumbling down again.

Yeap Capital economics, or more to the point, Roger Bootle, saved us a tonne of cash when we were deciding to fix or go variable back in 2008. It sounds about right..

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   90 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

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.