Wednesday, January 20, 2010

Is this a taste of things to come?

Skipton to scrap SVR ceiling and hike rate

Skipton Building Society is to scrap the ceiling on its standard variable rate meaning it will rise from 3.5 per cent to 4.95 per cent from March 1, Money Marketing understands.The lender will temporarily remove its ceiling, which meant that customers would never pay more than 3 per cent over the base rate. It is understood the lender is blaming unprecedented market conditions for the move

Posted by jack c @ 05:41 PM (2196 views)
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9 thoughts on “Is this a taste of things to come?

  • But Ray Boulger at the BBC says that ‘Variable rate mortgages are continuing to prove popular as some of the UK’s biggest lenders cut the cost of deals’

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  • This is the odd thing about reporting of SVRs. When rates plummeted, SVRs didn’t, but media sources such as the BBC were convinced they would go through the floor and said as much.

    Now rates look set to rise again, will the BBC and Times just not talk about SVR any more …?

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  • cynicalsoothsayer says:

    MPC increasingly irrelevant and ignored, and not in control.

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  • MPC increasingly irrelevant and ignored, and not in control.

    I’d like to think so, but they still seem to hold an awful lot of sway over the currency markets.

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  • mark wadsworth says:

    There’s nothing like Schadenfreude, and I should know 🙂

    The spread of SVR over the base rate has of course widened considerably over the past three years or so, SVR didn’t go down as fast as SVR, but just wait until the base rate increases, even if it’s only by 25 bps.

    Further than that, a reduction in interest rates from 6% to 4% is a 33% fall, but an increase from 4% to 6% is a 50% increase – it’s a damn’ sight more painful on the way back up…

    It’s like when you get a pay rise, it feels good for a month or two, but then your overall level of spending seems to adjust itself upwards and you end up feeling very little richer than before, but an actual pay cut – that’s painful.

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  • mark wadsworth says:

    Ooops.

    “SVR didn’t go down as fast as SVR” should read “SVR didn’t go down as fast as the base rate”

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  • “MPC increasingly irrelevant and ignored, and not in control”

    So long as interest rates are manipulated below the free market rate, inflation will rage, that is the purpose of the central planning of interest rates. Right now, the lack of deflation is being caused by inflation/theft made possible by the central planning (Sovietization) of interest rates. The creation of a central bank is one of the planks of the Communist Manifesto, because it centralizes control.

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  • fallingbuzzard says:

    @freemanphil, Which rates? Base rates, savings rates, swap rates or borrowing rates?

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  • mark wadsworth says:

    I like the commenter under the MM article who asked an earlier whiny moany commenter: “If you can not afford a mortgage at 5% should you really have a mortgage??”

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