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Interest Rates Have Peaked, Nationwide Predicts

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Ms Earley added: "The turmoil in credit markets strengthens the case of the doves on the Committee as the MPC will be reluctant to do anything to add uncertainty while the markets remain volatile."
The forecast came despite the lender's latest survey revealing that house prices climbed an average of 0.6pc across the UK this month, up from 0.1pc last month. However, the annual rate of inflation slowed to 9.6pc from 9.9pc.

Well thats it then - HPC postponed - lets all go home!

SB

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Nationwide have proved in many recent times that they know Sweet FA and should just shut their gobs because we all know what they spout is crap.

Haven't they always been fairly close to the mark?

To be fair it does look like interest rates are at or near their peak now.

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To be fair it does look like interest rates are at or near their peak now.

I'd agree, but the question now is... does it matter?

The credit crunch is happening - a hold won't change that. In fact, it would be great news - stop more OO's running into trouble (I don't want someone else to lose their home so I can get one), but remove speculators.

If they *drop* though... God help us (and I don't mean just HPC'ers, I mean everyone in 2010 when the even more inflated bubble bursts).

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you got that right, what is it with these pardon my term BANKERS, they are only putting off the inevitable and making it worse.

I'm totally giving up and thinking of never coming back.

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Well thats it then - HPC postponed - lets all go home!

SB

A move back to 2.5x/3.5x earnings will have more of an effect than base rate - plus if you take the recent increases on the "sub prime" mortgage rates these have increased regardless of base rate.

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I'd agree, but the question now is... does it matter?

The credit crunch is happening - a hold won't change that. In fact, it would be great news - stop more OO's running into trouble (I don't want someone else to lose their home so I can get one), but remove speculators.

If they *drop* though... God help us (and I don't mean just HPC'ers, I mean everyone in 2010 when the even more inflated bubble bursts).

Yep it appears that the MPCs efforts to keep the show on the road have proved disatrous,if only they had let it sink in 2005.We are now relying on foreign money to keep the ship afloat and they scamper like frightened rabbits at the slightest whiff of trouble.If certain high street banks have run into solvency trouble with HPI at 10%,how the hell are they going to survive if it goes negative.Possible cataclysmic outcome because of a bunch of retard doves led by Rachel Lomax.

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If interest rates have peaked then my c*ck's a kipper

Food inflation is about to go through the roof. Energy prices won't be having the downward effect on inflation over the next twelve months that has caused inflation to fall recently. The MPC's central projection was predicated on one further rise with risks to the upside of that central projection. The MPC does not target house prices as they don't form part of the CPI so HPI moderating is irrelevant. We'll have one more rise this year and then the fun will really start next year.

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A friend follishly took a role working IT support for a leading merchant bank..

although when I say follishly I do not mean financially...

From his and many other observations...

Our economy is based on debt, artificially low interest rates and some very stressed close to breaking point very rude traders...

yey haw

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Haven't they always been fairly close to the mark?

To be fair it does look like interest rates are at or near their peak now.

Well done Nohpc you have just revealed yourself to be totally out of touch and ill informed... The Nationwide predicted that interest rates had peaked at 5%, 5.25% and 5.5%. One of these days they'll be right.

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If interest rates have peaked then my c*ck's a kipper

Food inflation is about to go through the roof. Energy prices won't be having the downward effect on inflation over the next twelve months that has caused inflation to fall recently. The MPC's central projection was predicated on one further rise with risks to the upside of that central projection. The MPC does not target house prices as they don't form part of the CPI so HPI moderating is irrelevant. We'll have one more rise this year and then the fun will really start next year.

I'm with Tuffers. Those cheap deals to get people buying in summer, haven't lasted long, and them going back up again will really add to inflation 2.6 is my prediction

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"If interest rates have peaked then my c*ck's a kipper

Food inflation is about to go through the roof. Energy prices won't be having the downward effect on inflation over the next twelve months that has caused inflation to fall recently. The MPC's central projection was predicated on one further rise with risks to the upside of that central projection. The MPC does not target house prices as they don't form part of the CPI so HPI moderating is irrelevant. We'll have one more rise this year and then the fun will really start next year. "

So so true its amazing how the press and the VI's persistantly choose to ignore whats staring them in the face.

When CPI goes over 3% later in the year lets see what they have to say

6.25% minimum next year

I really am starting to beleive that due to the strength of the world economy even with a full blown HPC the UK will just about avoid a recession.

No rate cuts here move a long please

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If interest rates have peaked then my c*ck's a kipper

Never heard that one before! :lol: Explains a lot about some women I've known, though... :blink:

If the peak is around 6% then historically this is low, it sounds "too good" to be true, like squeazing a balloon at one end and seeing no air go to the other.

If this is the peak for a short time, maybe, but thereafter I question it. If it is then my kipper's a boil in the bag sardine.

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swap rates

LIBOR

Check these out. Looks like its going up

I've been wondering about that. Aren't these recent increases just reflecting the decreased liquidity and the banks' reticence to lend to each other? I'm not sure they say much about future IR positions at the moment, though I'm happy to be corrected by someone who knows more about this stuff.

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Guest mSparks

MPC = inflation, the upside risks to inflation haven't changed -> prison strike on news this very morning.

Interest rates (not just base rate ) are tightly linked to two factors.

a)combined higher company profits = combined higher interest (money becomes more expensive).

b)increases in bad debts = increases in interest rates (clamour to recover and protect lost funds as seen at UScorp these last few weeks).

I dont see either of these changing anytime soon, but the base rate will almost certainly lag behind.

peaked, no way, plateaued for a while, more than likely, but then as I pointed out the last MPC minates I read said rates are already at the point where demand will slow, possibly sharpley. Rates may be historically low, but we are also historically more indebted.

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Food inflation is about to go through the roof.

According to Moneyweek, China is the big threat to inflation, partly due to competition for resources, but also because their inflation is currently running at 5%, and all our cheapy products are increasing in price.

In this environment, how does raising rates drive down inflation?

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Guest mSparks
According to Moneyweek, China is the big threat to inflation, partly due to competition for resources, but also because their inflation is currently running at 5%, and all our cheapy products are increasing in price.

In this environment, how does raising rates drive down inflation?

because if people dont have jobs, they cant buy anything, so demand decreases, taking inflation with them.

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So Nationwide are predicting we have hit the peak in rates?

Again?

How many times have they got it wrong now?

4?

5?

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The proof is in the pudding, Nationwide Long Term Fixed Mortgage Rates are on the up. Their corporate communications team must be working in some kind of parallel universe as the left hand doesnt appear to know what the right hand is doing.

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I've been wondering about that. Aren't these recent increases just reflecting the decreased liquidity and the banks' reticence to lend to each other? I'm not sure they say much about future IR positions at the moment, though I'm happy to be corrected by someone who knows more about this stuff.

As far as I understood it - these rates are an indication of the future base rate. I may be wrong though

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Well thats it then - HPC postponed - lets all go home!

SB

For the record, Nationwide economists have NOT predicted that interest rates have peaked.

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