Wednesday, January 9, 2008

Will interest rates fall below 5% by April?

Barclays Stockbrokers predicts the MPC will cut rates in tomorrows meeting

Henk Potts, Investment Analyst, Barclays Stockbrokers, comments on the forthcoming interest rate announcement: "The pressure has been building and building on the Bank of England to cut interest rates this week. A mixture of a weakening property market, tightening credit conditions and falling business and consumer confidence are all conspiring to force the Monetary Policy Committee to act sooner rather than later. We expect a quarter point cut on Thursday and further quarter point cuts in February and April, taking interest rates back to 4.75%."

Posted by converted lurker @ 10:24 AM (703 views)
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14 thoughts on “Will interest rates fall below 5% by April?

  • Perhaps someone would like to tell me what is going to happen to inflation???

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  • tyrellcorporation says:

    Inflation is going to be actively encouraged and all the stops pulled out to hide it from the stats and the people. This is the only way the UK government is going to erode its way out of the debt mire it is in. Expect your savings and Sterling to be trashed in the process.

    I’ve just squirelled some cash away in the Nationwide 6.7% year e-bond but that’s far and away the best deal I can see tou prevent my savings going down the poop shute!

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  • I agree with Tyrell – they will try to inflate out!!!

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  • Captain Darling,….I’ve got a cunning plan…… !

    Why not do a 3 year deal with all the public sector people so that when inflation goes up, they will be stuck with the miserable pay rises they agreed to when inflation was a lot lower?

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  • Captain Darling,….I’ve got a cunning plan…… !

    Why not just shoot yourself…

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  • C'mon Correction says:

    Er no, is the answer.

    I’m getting more certain that inflation is going to get out of control in the UK over the coming years. I think the only thing to temper it will be falling house prices (and i mean -15%+ falls within a year). There is every chance that rates this time next year will be above 6%. Why not ??

    For me it’s either HPC of -15% and slightly lower rates this year 4.75-5%, or no HPC this year and rates rising again to above 6 – 6.5% and THEN a HPC in 2009-10. – No other outcome, the knife-edge we sit upon is getting sharper and sharper.

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  • crash bandicoot says:

    Perversely I don’t think it makes a lot of difference to house prices what they do to the interest rate now. With wall to wall media coverage that houses don’t always go up in price and tightening lending conditions the “supertanker” has turned and is heading south as we speak. Saving £30 or £40 per month is hardly going to mask the fact that you are effectively signing up to pay 8x your salary for a 2 bed flat. Is is a monument to constructive lending practices that prices were able to reach such a level in the first place.

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  • National Savings index-linked bonds look not too bad at present. If you go for a 3-year term you get interest pa of 1.35% average plus inflation calculated by RPI (yes not CPI) AND it’s tax free! Plus theoretically very safe.

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  • You say wall to wall media coverage that houses don’t always go up in price. I suggest you take a look at the front page of today’s Daily Express “House Prices Up 5.2%” in super-sized text, with a smaller headline “Who says there’s a slump ?”. This sort of hyping/poor journalism needs to be firmly shut down and lowering the interest rates will only provide added ammunition for such rags to print further such headlines. Quite aside from all the additional harm lowering rates will do to the already fatally wounded economy.

    But, all that said, if Brown is the puppet master for the BoE that we suspect, then interest rates will probably come down tomorrow irrespective.

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  • george monsoon says:

    Im going to stick my neck out here and predict that rates will remain unchanged tomorrow.

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  • The BBC also does not help. Just as a repeat of last month before IR decision their top news story was the economic woes. This is a letter of complaint I wrote to them:

    Ref: BBC NEWS
    I notice that the BBC are repeating last month’s bleating trick for rate cuts just before the BoE decision on interest rates. As last month, just before IR decision the BBC News used the economical woes as top dramatic story, really dramatizing the economical woes more than it usually does. In contrast the Halifax December house price rise was reported in a subdued way and quickly swept under the carpet.
    Why does the BBC think it has the right to influence the MPC policy? Inflation is rife.
    I wonder what the vested interests behind the BBC are?
    It has made me realize that the BBC reporters are wrongly biased.

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  • The BBC also do not help. Just as last month their top news story was the economic woes. Theis is the letter of complaint I sent them:

    Ref: BBC NEWS
    I notice that the BBC are repeating last month’s bleating trick for rate cuts just before the BoE decision on interest rates. As last month, just before IR decision the BBC News used the economical woes as top dramatic story, really dramatizing the economical woes more than it usually does. In contrast the Halifax December house price rise was reported in a subdued way and quickly swept under the carpet.
    Why does the BBC think it has the right to influence the MPC policy? Inflation is rife.
    I wonder what the vested interests behind the BBC are?
    It has made me realize that the BBC reporters are wrongly biased.

    Reply
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  • At Long last. The unions are starting to look at wage negotiations that reflect real world inflation and not the cooked figures produced by the masterchef Gordon Brown.

    By the way, has anybody else noticed, but most government economic comments being made by the government are being made by Gordon Brown, while Alistair Darling is standing in slience by his side like a lap dog.

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  • george monsoon says:

    We are a dictatorship, with an unelected despot at the helm.

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