Thursday, December 4, 2008

Interest rates cut by one third – but will that help?

Interest rates cut by one third - but will that help?

The bottom line is that despite the dramatic nature of these cuts, the actual impact they'll have won't be that great. Sure, some mortgage borrowers will find their monthly payments coming down. But for new lending, most of the government's public pressure on the banks is just showboating. Banks will carry on the way that they always have. Lower base rates aren't going to increase the amount of credit available.

Posted by damien @ 03:56 PM (785 views)
Please complete the required fields.



9 thoughts on “Interest rates cut by one third – but will that help?

  • Aha but then its those nasty banks faults and not Gordon’s after all he has done everything he could. What a hero! or have i missed a comma and question mark?

    Reply
    Please complete the required fields.



  • When Sterling looks as though it is about to completely collapse, I imagine there will be a lot of borrowing then.

    Reply
    Please complete the required fields.



  • Putting my VI to one side – it is difficult to argue with what he has been done regarding reposessions.

    I had a mortgage not so long ago, if would have been nice to think that I would have a couple of years to sort things out if I ran into trouble.

    But nothing has been done for FTBs. Around half of mortgagees have seen their repayments reduced as a result of interest rate cuts – but the lower rates don’t apply to new mortgagees – even if they have the necessary deposit.

    Of course people like myself have cash in the bank and are looking for a low risk investment with a return greater than 3%. You see where I’m going ?

    Reply
    Please complete the required fields.



  • But doesn’t Gordon and his ilk effectively own some of the banks thereby changing the modus operandi of the banks#?

    IMO he will pretend to establish the notion that the Government and RBS,HBOS etc are not fingers on the same hand

    Reply
    Please complete the required fields.



  • Yeah I see where your going…. To live with your mum and dad.

    Reply
    Please complete the required fields.



  • They’re scared of deflation. All the liquidity-creation mechanisms have broken down, losses are rising faster than recapitalisation, deleveraging means selling assets into illiquid and falling markets, central banks and governments are the only lenders and spenders and there could be a downward spiral of investment, consumption, prices, jobs, demand etc. Debts would be the opposite of being inflated away – they’d become more onerous, with added impetus to corporate and household defaults. Gains for savers would be the only upside.

    Reply
    Please complete the required fields.



  • It wil help me….to finally decide to move my life savings from my local Lloyds into another account
    My local Lloyds was depending on me.
    Probably have to close down that branch down now.

    {And all you Banks who colaborate with the government in this mortgage holiday nonsense wont be seeing any of my business either.}

    Reply
    Please complete the required fields.



  • Imminent_plunge says:

    I reacted to the cut by dreaming of the next headline ‘Savers rebellion to interest rate cuts – billions withdrawn from deposit accounts’, I thought about keeping my deposit in a safe at home, then realised what a great opportunity it would represent for thieves. I would c**p my pants just going for work for the day, couldn’t consider a holiday. So what now?

    Reply
    Please complete the required fields.



  • Local lloyds rang the wife today apologising about having to cut the savings rate on her account and suggesting a bond. Having checked out the competition including pukka building societies etc the best she can currently get in the UK for her little stash of rainy day cash is 5% with a 3 year lockin. Not worth bothering with, prudent saving as a concept in this country is a dead duck, god help us all.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>