When Will UK Raise Interest Rates!

[delboypass]

Im depressed as someone put a bid in on a house before me to seal the deal and the house went under offer..

so instead im going to pray for interest rate rises!!!

Are they going to come in July??

[Realistbear]

Barring a larger tidal wave than expected from Japan (if they ever move) we should see IR rise after Gordon ascends to No. 10. February 2007--maybe. By then he will have waited too long so we may expect a string of hikes taking us to 6% by next summer.

In other words, with Gordon and his political ambitions who really knows?

If economic prudence was the determining factor we would already be at 5% moving toward 6% by year end. But, as there is no inflation in the economy.....................................

[Pablo-silver or lead?]

.25% July or Aug. One more by year end. Between 4 and 7 .25% increases in 07.

Pablo Silver or lead?

[simon99]

Dont hold your breath. Labour have literally staked their reputation on low interest rates. I expect either the inflation target to rise, or inflation itself to miraculously stay around 2%.

Edited June 27, 2006 by simon99

[Realistbear]

Gordon has move financial goalposts before so he may consider CPI 3%.

In the meantime, the EZ may see more hikes than Trichet had foreseen:

http://uk.biz.yahoo.com/27062006/94/eurozo...g-ifo-data.html

Tuesday June 27, 03:13 PM

Eurozone bonds fall after strong Ifo data

Eurozone government bonds fell on Tuesday after strong data sparked fresh worries about more rate rises by the European Central Bank.

The closely watched Ifo index of confidence in Germany rose to a new

15-year high

of 106.8 in June

from an upwardly revised 105.7 in May, against expectations of a decrease.

Shorter-dated eurozone government bonds fell sharply but 10-year Bund also clocked in losses.

As prices fell in afternoon trading, the yield on the two-year Schatz rose 4.9 basis points to 3.610 per cent and the yield on the 10-year Bund added 1.6bp to 4.103 per cent.

The ECB at 2.75% is obviously not going to last.

[Bingley Bloke]

The interest paid on my Halifax Current Account has just shot up to 5.12% so clearly they're expecting a rise before too much longer.

[Golden Shower]

There's no hurry for IRs to rise. I think we'll see the mini-boom in HPI subside over the coming months, wage inflation is tame and unless energy starts causing serious concerns (lets remember the BoE don't seem too concerned at the moment) I can't see much chance of a rise in the next few months.

[Marina]

How about - not in your lifetimes?

[Realistbear]

The world is pricing in further hikes but we can be safe in the UK with the assurance from Gordon that there is no inflation therefore no need to raise the rates:

http://www.ft.com/cms/s/c31391fa-05a6-11db...000e2511c8.html

Bourses slip on worries over interest rates

By Dave Shellock

Published: June 27 2006 07:33 | Last updated: June 27 2006 17:31

Persistent worries about

rising global interest

rates kept European stocks under pressure on Tuesday.

Who is Gordon going to blame when he does have to play catch-up with the rest of the world?

[Golden Shower]

How about - not in your lifetimes?

Hmmm, low interest eutopia.

Another point to remember is the MPC voted 7-1 for a hold. Remember who the 1 was? Sadly he passed away, so the MPC looks fairly tame at the time being.

[Realistbear]

Hmmm, low interest eutopia.

Another point to remember is the MPC voted 7-1 for a hold. Remember who the 1 was? Sadly he passed away, so the MPC looks fairly tame at the time being.

The Muppets do not call interest rates, Gordon does. He appoints the external members and the "treasury" appoint the rest. The BoE are a political pawn in the hands of an ambitious politician. Mervyn has been warning about inflation, bumpy roads ahead and the dangers of HPI for years and if he was in Ben's position we would already be seeing rates in line with the Fed.

David Walton was perhaps the only independently minded member of the MPC.

[IMupNorth]

Do you remember those days - only a few weeks ago - when Realistbear (the most unrealistic bear ever) was the cheerleader for the 'IR must rise now' gang !!??

Noticed how he's started to change his tune - and now says IR won't raise until Gordon Brown becomes PM in feb 07 ..... ha !!!

RB is just hiding behind the political smokescreen of Gordon Brown, the reality is that there is no economic reason in the UK for IRs to rise in the foreseeable future - thats why RB is predicting 8 months out into the future now.

The balance of probability is that IRs will remain at 4.5% for a while yet. There is some speculation that IRs might rise by 0.25% (gee wiz) by Xmas, but the reality is that the economic stats just don't point in that direction at the moment.

The BOE won't panic, have no need to panic and are really, really trying to maintain financial stability. They really don't want to raise IRs at the moment.

[Pablo-silver or lead?]

.25% July or Aug. One more by year end. Between 4 and 7 .25% increases in 07.

Pablo Silver or lead?

Either they play catch up and do as above, or delay and put them up in 6 to 9 .25% graduations in 07

and carry on into 08.

muppetnorth choose your poison?

Pablo Silver or Lead?

[Guest wrongmove]

The Muppets do not call interest rates, Gordon does.

Actually, the markets call rates. The BoE can only change the overnight rate. Rates for any longer are set by trading in the money markets.

You seem to think GB is some all powerful being - he's actually just a politician (ffs). If the markets decides to put rates up (i.e sell bonds. treasuries) then rates will go up, regardless of what the BoE or GB do.

[Bubble Pop Electric]

The BOE won't panic, have no need to panic and are really, really trying to maintain financial stability. They really don't want to raise IRs at the moment.

There's a difference between don't want to raise them, and aren't going to raise them. There are probably a whole host of reasons why they don't want to raise them, that doesn't mean that they're not going to. You forget what rediculous times we are in, and the majority have accepted it as the norm. It couldn't possibly change - they won't let it....Why is it different this time IUN? I always think we'll look back at these times in a few years time and say - that was a bit mad wasn't it. Just like any other bubble, people thought nothing would change, better buy now, etc. Don't you think the powers that be, who had other peoples fate in their hands back then didn't want to panic, or change things.

Unfortunately, it isn't just down to rates - but sentiment, and once the investers get uncomfortable, and you put the combination of a couple of rate rises, more btl ll's becoming a bit edgy about their investment and people want to jump ship, can't sell, etc, the whole scene will turn a bit unpleasant for a lot of people. Maybe the BoE won't panic - but they might well be the straw that broke the camels back when they start their rate rises. The BoE, set the low rates the people set their confidence.

It's already starting to turn, and that's without a rate rise, when it's filters down to the rest of the population, that sentiment, and that's happening as well, there may well be no stopping the price falls.

I also think maybe the sheeple (my sister etc) will get bored of the hype, a bit like property programmes, their own mass force feeding of the population with them, will be in the end their own downfall. Love is the closest thing to hate.

[Pindar]

EAs seem to be going out of their way to dispose of properties that have been hanging around for months. Two bed flats in particular. I've viewed about six properties in the last week that have been hanging around for months and have seen price reductions. Two bedroom apartments, built to a high standard going for £150k in the southern home counties. EAs know it too.

On interest rates - I suspect rates may well remain unchanged for some time to come. You just have to look at the number of 10 year fixed rates (5.5% on average) around to conclude that.

If anything, it is affordability and the supply side increasing that will bring prices down. They've already started to fall. As somebody mentioned in another thread, the investment buyers have no intention of moving up the ladder. This in time, precipitates an over supply in the next rung up the ladder, meaning prices come down as supply increases in relation to demand.

[Guest xeouialp]

Actually, the markets call rates. The BoE can only change the overnight rate. Rates for any longer are set by trading in the money markets.

You seem to think GB is some all powerful being - he's actually just a politician (ffs). If the markets decides to put rates up (i.e sell bonds. treasuries) then rates will go up, regardless of what the BoE or GB do.

Yeah now that's a very good point actually. Aren't interest rates just a time-based expression of the price of money? And if price is a just self-regulating point of intersection between supply and demand for a commodity, in this case money, it only makes headlines because of the monthly MPC meeting. But the setting of interest rates is already half way down a long road of cause and effect. Other things have always happened to compel a Central Bank to set their rate at a particular level, they don't actually have any decision-making power at all, the market has already decided.

[Levy process]

How about - not in your lifetimes?

Can I just ask: Have you suddenly become uber negative about everything?

[marko]

How about - not in your lifetimes?

Ha ha, you really are in denial if you believe that.

[boo]

Hi

Does anyone know who will take over from GB as chancellor when Blair eventually leaves?

Any will they just carry on where the fat man left off?

[tinecu]

Im depressed as someone put a bid in on a house before me to seal the deal and the house went under offer..

so instead im going to pray for interest rate rises!!!

Are they going to come in July??

'Betfair' odds on a 0.25 hike in july just got longer.

Moved from 9.7 to 25-1....over the last week (probably on the news of the death of the only sane menber).

Looks like the bubble will be inflated for at least another month while inflation takes root.

[FreeFall]

When will the rates rise? When they absolutely have to - I personally think the BoE would see Sterling devaluing dramatically before raising the IR's....

[Bear Goggles]

Do you remember those days - only a few weeks ago - when Realistbear (the most unrealistic bear ever) was the cheerleader for the 'IR must rise now' gang !!??

Noticed how he's started to change his tune - and now says IR won't raise until Gordon Brown becomes PM in feb 07 ..... ha !!!

RB is just hiding behind the political smokescreen of Gordon Brown, the reality is that there is no economic reason in the UK for IRs to rise in the foreseeable future - thats why RB is predicting 8 months out into the future now.

The balance of probability is that IRs will remain at 4.5% for a while yet. There is some speculation that IRs might rise by 0.25% (gee wiz) by Xmas, but the reality is that the economic stats just don't point in that direction at the moment.

The BOE won't panic, have no need to panic and are really, really trying to maintain financial stability. They really don't want to raise IRs at the moment.

He he. Not so long ago you were saying they were going to fall, and now you say they might rise, so don't get too cocky

I'm going to stick my neck out and tell you what I think is going to happen to interest rates:

I'VE GOT NO F***ING IDEA!!!

(just like you)

[Alba]

Im depressed as someone put a bid in on a house before me to seal the deal and the house went under offer..

so instead im going to pray for interest rate rises!!!

Are they going to come in July??

Why are you so depressed after all this is the tactic you advocated............Set a stop limit and then walk away and then prices will not keep going up. And offers over with closing dates is asking for idiots to walk in and put in sealed bids.

You weren't going to wait for a closing date were you??

This was not in Aberdeen was it?............where the market is in decline!!!!!!

[Realistbear]

Do you remember those days - only a few weeks ago - when Realistbear (the most unrealistic bear ever) was the cheerleader for the 'IR must rise now' gang !!??

Noticed how he's started to change his tune - and now says IR won't raise until Gordon Brown becomes PM in feb 07 ..... ha !!!

RB is just hiding behind the political smokescreen of Gordon Brown, the reality is that there is no economic reason in the UK for IRs to rise in the foreseeable future - thats why RB is predicting 8 months out into the future now.

The balance of probability is that IRs will remain at 4.5% for a while yet. There is some speculation that IRs might rise by 0.25% (gee wiz) by Xmas, but the reality is that the economic stats just don't point in that direction at the moment.

The BOE won't panic, have no need to panic and are really, really trying to maintain financial stability. They really don't want to raise IRs at the moment.

Yup, IR must rise but with Gordon in charge they won't. Not until its too late that is.

Why SHOULD they rise? No reason at all if you believe the CPI figures. But then who does believe them?

I do not think the HPC is solely dependent on IR. Affordability was overstretched years ago. Unemployment is on the rise and even the once hallowed services sector is getting hit now. Sterling will eventually buckle as Gordon sticks to "read my lips--there will be no rise in IR" and that will exacerbate inflation which will in turn cause another revision in the CPI by either moving the goalsposts (Gordon's speciality) or removing items from the "basket" that are going up in price as a result of sterling weakness.

HPI is over with or without Gordon's restriction on IR hikes. All bad things must come to an end, they always do.

1 U.K. £ =

1 1.8186