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Killer Bunny

Mkt Says U K Rate Rise Spring 2016. When Do You Say?

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OK, so some say no rate rise and some say there will be.

What would be interesting would be the results of this poll and if you would care to actually state your answers as a post.

I'll start:

No rise

0.5% is the height

2009 the height of rates.

Any point or chance in pinning this thread? Maybe we should do a poll on that? ;)

Edited by Killer Bunny

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Another pointless rate rise thread.

When it happens you'll know about it.

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Can you have an option for the first rate rise date, along the lines of "undecided". I I suspect it's still relevant to you. (?)

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No rise for years. No matter what the circumstances, some excuse or other will always be found to keep things as they are now.

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In my experience, rate changes happen unexpectedly, quickly and are more extreme than anyone foresaw. I'm not expecting them to be "different this time".

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When unemployment falls below 7%. Mr. Carney said so. Ooh errr :unsure: Maybe he meant rises above 7% now unemployment data has reversed tack? :D

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Would the base rate moving from 0.5% to 1.5% really effect the housing market much? I'm aware that it's a 200% increase but the effect for the average man or landlord in £'s and pence is what exactly?

It strikes me as a similar move of increasing VAT from 17.5% to 20%. Bugger all effect on sales.

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It's utterly hopeless. All the central bankers have done since 2008 is engineer a even greater debt ponzi. The next move in UK interest rates is down (more QE) not up.

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It's utterly hopeless. All the central bankers have done since 2008 is engineer a even greater debt ponzi. The next move in UK interest rates is down (more QE) not up.

Correct. A Recession will come before a rate rise and QE will come again. :(

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Would the base rate moving from 0.5% to 1.5% really effect the housing market much? I'm aware that it's a 200% increase but the effect for the average man or landlord in £'s and pence is what exactly?

It strikes me as a similar move of increasing VAT from 17.5% to 20%. Bugger all effect on sales.

IO mortgage coming off a low two year fix of 2% would see their payments go up by 50%

Your average BTL IO at 4% would see their mortgage rate go up by 25% and a rise in their tax bill to go with it ,,technically known as a double whammy ( i just love how that works ) but probably ain't going to see it in action for a long time or at least caused by a base rate rise

Edited by long time lurking

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I am in agreement with KB that the trend is down.

But as I have said before. It's like an aeroplane that has lost power you know it is going to come down. However if it has got enough speed and the pilot pulls back on the controls it will go up a bit before resuming it's decent.

The gravity that is pulling the plane down is that the rich keep getting richer and the poor poorer. When saving get to a trillion and debt equals a trillion also.Rate will have to be a lot lower than they are today.

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Can't answer, as my view is rates won't move until the Fed moves. However the other problem for the UK govt is the deficit if rates move up before the deficit is lowered it's going to prove interesting how the debt servicing is met, it could prove crippling unless the BoE is simply going to print the money to give to the bankers?

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A lot will depend on the price of energy continuing to mask wage pressures and home grown inflation.

However, even in the absence of headline retail inflation a decision could rest on asset markets, even though they are not specifically part of the remit.

FTSE 100 up at 7500 and HPI at 10% by the year end, then my guess is they will raise in January, if asset markets flat line from hereonin then my guess is not.

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Can't answer, as my view is rates won't move until the Fed moves. However the other problem for the UK govt is the deficit if rates move up before the deficit is lowered it's going to prove interesting how the debt servicing is met, it could prove crippling unless the BoE is simply going to print the money to give to the bankers?

Not really. BoE has already covered £375bn of it & Carney has been pretty clear - equilib rate will be about 1/2 historical avg.

BoE controls the policy rate - I'd pay attention to what he's saying. That's where we're headed.

Also worth remembering Osbourne has significantly smoothed his pre-election austerity trajectory which gives Carney a little more wiggle room which I'm sure he will be very happy to (eventually) take advantage of to get him off the effective ZLB.

Edited by R K

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Well we can all rest easy now we know that Carney is fully in charge and can determine exactly when interest rates will rise and by how much.

George Osborne must be a bit miffed that he has no say in the matter, still that's life I guess.

edit to add; Carney has said a lot about what he would do but done very little.

He's had no reason to.

I;m not entirely sure why people are especially interested in the start of the tightening cycle anyway. It's the end of the tightening cycle where all the action happens & that, I would humbly suggest, is a long way off.

If you look to US 2 yr yields have been rising fairly consistently since the Taper Tantrum & suggest a modest policy rate rise can be accomodated wthiout inverting the curve. 10 yrs ofc are now over the H2 '14 "deflation" scare too and have been rising since Jan (6 months) and reversed all the falls from the oil price.

Looks like a fairly standard (albeit different for well known reasons & delayed) recovery at this point.

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Can't answer, as my view is rates won't move until the Fed moves. However the other problem for the UK govt is the deficit if rates move up before the deficit is lowered it's going to prove interesting how the debt servicing is met, it could prove crippling unless the BoE is simply going to print the money to give to the bankers?

So answer re FED. There's no difference.

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Looks like a fairly standard (albeit different for well known reasons & delayed) recovery at this point.

What kind of business cycle starts with asset prices and debt levels already at record highs? Not a "standard" one.

Edited by Dorkins

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