Interest rates decisions /dates for your diary

[Gemma Rose]

Assuming there are no emergency announcements here are some key dates .  Bit of a wait till November but at least there’s 2 to look out for this week.

 And for those who keep an eye on Turkey 🇹🇷 😂 20th Oct  , 24th Nov.

[Orb]

Is it coincidence or by design that the BoE always meet just after the FED?

[highcontrast]

So a whole month for UK PLC to implode/pound to tank again?

Chances of an emergency rate decision between now and Nov.3?

[Gemma Rose]

54 minutes ago, Orb said:

Is it coincidence or by design that the BoE always meet just after the FED?

Yes I can never make my mind up if it’s a good or a bad thing …or doesn’t matter at all !

[Glental]

If the FED lowers rates we can copy them quickly. If it raises rates it gives us time to think of an excuse 

[Dreamcasting]

There's been a lot of talk of mega rate rises in November. Unfortunately for us, that is only .75 as far as the BOE is concerned, not the 1 - 1.5% people seem to think.

Edited October 2, 2022 by Dreamcasting

[winkie]

 

[dpg50000]

1 hour ago, winkie said:

 

Those interest rates... wow. I'm guessing they were around about inflation at the time?

[Sprite]

1 hour ago, Dreamcasting said:

There's been a lot of talk of mega rate rises in November. Unfortunately for us, that is only .75 as far as the BOE is concerned, not the 1 - 1.5% people seem to think.

I could see this happening if the markets stabilize. GBPUSD is now > 1.11 so everything looks much rosier than last week. 

The only way the above doesn't happen is if the markets continue to lose confidence in the Truss regime which at this point is entirely possible.

 

[henry the king]

2 hours ago, Dreamcasting said:

There's been a lot of talk of mega rate rises in November. Unfortunately for us, that is only .75 as far as the BOE is concerned, not the 1 - 1.5% people seem to think.

I think if it was now they would go 1%. But I agree they could easily go down to 0.75%.

Honestly though, either is fine at this stage. The HPC conditions have already been met. I don't even care anymore about the BoE. 

Mortgage rates are already closing in on 6%.

Edited October 2, 2022 by henry the king

[Gemma Rose]

I’m actually a bit worried if interest rates to go too high (whatever too high is ).  Right hear me out, I am a massive saver I’ve got all my house money and some more in savings and I’m good to go so naturally I would love interest rates to go up massively but I am wondering if there is a tipping point where those people with mortgages will be bailed out should interest rates go so high. Does that make sense ?

[reddog]

1 hour ago, henry the king said:

I think if it was now they would go 1%. But I agree they could easily go down to 0.75%.

Honestly though, either is fine at this stage. The HPC conditions have already been met. I don't even care anymore about the BoE. 

Mortgage rates are already closing in on 6%.

Although I would be annoyed at 0.75%, there is a meeting every 6 weeks or so, so even after the 0.75% there will still be plenty more to come.

[henry the king]

1 minute ago, reddog said:

Although I would be annoyed at 0.75%, there is a meeting every 6 weeks or so, so even after the 0.75% there will still be plenty more to come.

The only time they stop and pivot to cuts is if there is a financial crisis. There is no way out from a HPC at this stage.

[Purple Ronnie]

8 minutes ago, henry the king said:

The only time they stop and pivot to cuts is if there is a financial crisis. There is no way out from a HPC at this stage.

Oh Lord I really hope so!

[Happening]

20 minutes ago, henry the king said:

The only time they stop and pivot to cuts is if there is a financial crisis. There is no way out from a HPC at this stage.

in 2008/9 there was no HPC when they ZIRP'd and printed, imho it was a small correction.

[Nick Cash]

1 hour ago, Gemma Rose said:

I’m actually a bit worried if interest rates to go too high (whatever too high is ).  Right hear me out, I am a massive saver I’ve got all my house money and some more in savings and I’m good to go so naturally I would love interest rates to go up massively but I am wondering if there is a tipping point where those people with mortgages will be bailed out should interest rates go so high. Does that make sense ?

I don’t think any government would bail out mortgage payers. Too divisive. I think the era of regulated markets is finished, it’s an oxymoron. Either nationalise (railways, energy, water etc) or let the free market decide. 

[Gemma Rose]

26 minutes ago, Nick Cash said:

I don’t think any government would bail out mortgage payers. Too divisive. I think the era of regulated markets is finished, it’s an oxymoron. Either nationalise (railways, energy, water etc) or let the free market decide. 

 

I do hope you’re right Nick.

I keep worrying about them (Banks/governments whoever decides these things ) offering mortgage holders the right to extend their mortgages to 50 years( thus making the monthly payment lower ) and possibly any new mortgagees  being offered this as well. 
I’m not great with mortgages but as far as I can see you can’t use this extension idea with interest only mortgages which obviously is the business model for many Buy to let landlords. 
Boris Johnson was talking about introducing 50 year mortgages  just before he was given the boot.

Is it possible they might save the owner occupier with repayment mortgages and let the interest only Buy to let landlords take the hit. This could be quite popular with the general public.

 

[Nick Cash]

58 minutes ago, Gemma Rose said:

 

I do hope you’re right Nick.

I keep worrying about them (Banks/governments whoever decides these things ) offering mortgage holders the right to extend their mortgages to 50 years( thus making the monthly payment lower ) and possibly any new mortgagees  being offered this as well. 
I’m not great with mortgages but as far as I can see you can’t use this extension idea with interest only mortgages which obviously is the business model for many Buy to let landlords. 
Boris Johnson was talking about introducing 50 year mortgages  just before he was given the boot.

Is it possible they might save the owner occupier with repayment mortgages and let the interest only Buy to let landlords take the hit. This could be quite popular with the general public.

 

I think the buy to let market is the least likely to get help. They are the ones, after all, who have pushed up rents. They’ve been a classic case of unintended consequences from selling off council homes. Perfectly rational behaviour at an individual level just not great for society.

[winkie]

13 hours ago, dpg50000 said:

Those interest rates... wow. I'm guessing they were around about inflation at the time?

Inflation was high in the 70s......high interest rates helped bring inflation right down in the 80s.

[Data Dave]

22 hours ago, Gemma Rose said:

Assuming there are no emergency announcements here are some key dates .  Bit of a wait till November but at least there’s 2 to look out for this week.

Thanks Gemma

[TheResponsibleHouseBuyer]

20 hours ago, Orb said:

Is it coincidence or by design that the BoE always meet just after the FED?

I don't know about economics but surely because the $ is traded globally as the reserve currency, then we/BOE have to do it retrospectively.

Then again, what would happen if we doubled the rate increases compared to the US? Would we be more competitive? Probably....

Someone is shorting the UK tax payer a lot i think...

[Blobsy]

There is a Fed emergency meeting later.

[henry the king]

8 minutes ago, Blobsy said:

There is a Fed emergency meeting later.

Not for rate hikes though.

[dpg50000]

5 hours ago, henry the king said:

5 hours ago, Blobsy said:

There is a Fed emergency meeting later.

Not for rate hikes though.

https://www.federalreserve.gov/aboutthefed/boardmeetings/20221003closed.htm says they are considering the following matters - is that not to do with interest rates (genuine question)?

 

Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.

 

Also, lots of posts on  the Internet saying this isn't an emergency meeting?

Edited October 3, 2022 by dpg50000
Question re: emergency meeting

[TenYearToGetMyMoneyBack]

12 hours ago, winkie said:

Inflation was high in the 70s......high interest rates helped bring inflation right down in the 80s.

So to recap the savings rates in the "mid 1980s" advert were 12.86% for a 2 year bond or 11.79% for a 90 day notice account.

From other sources :

In 1985 the BOE base rate was 11.375% while inflation was 6.1% 
In 1986 the BOE base rate was 10.875% while inflation was 3.4%

I have just dug out my mortgage offer from 1986 and the interest rate quoted is "13.25% standard + 0.5%"
I'm not sure what the extra 0.5% was for although I did only put down a 7.5% (£1800) deposit.
All of the interest would have been eligible for MIRAS reducing the effective rate to 9.76%.
A colleague  has recounted several times how back in the 1980s his Building Society accidentally 
sent him some correspondence ignoring MIRAS making him think "I can't possibly afford that !"

Personally, I still recall my solicitor going over some details about the house I was buying and saying
"The house was £22000 when new so its gone up almost £2000 in two years. That's good isn't it" in a Bruce Forsyth "Didn't they do well manner".

So a house that was going up in price at the same rate as inflation while costing inflation + 6% in interest payments was considered to be a good buy. Of course from around 1988 there was a boom as everyone tried to buy before joint MIRAS was stopped followed by a bust which lasted most of the 90s.