Saturday, July 24, 2010

The illusive rate rise !

When will interest rates rise?

What next for interest rates? We wish we could give an exact forecast, but we can't. We can, however, arm you with the right information and views from those in the know so you can make your own call.

Posted by happy mondays @ 08:19 AM (3272 views)
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11 thoughts on “The illusive rate rise !

  • tenyearstogetmymoneyback says:

    Have a look at http://www.thisismoney.co.uk/news/article.html?in_article_id=498716&in_page_id=2

    (There is a link within the article). It explains

    a) How on some measures we are in a worse situation than Greece

    b) How it is Gilt rates (as opposed to the BOE rate) which determines the price of mortgages.

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  • The next move by the wizards over at the BoE will be QE-II, but I’d happily be proved wrong.

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  • The real question is not when interest rates will rise because if we’re in the same deflationary spiral as Japan (you know, the one UK economists said we would avoid), interest rates simply won’t be raised.

    However, the Bank of England is eyeing up the idea of another moneyprinting binge. Because in the midst of the deepest recession and austerity measures since the war we can always afford to throw a few hundred billion of free money at the banks.

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  • The BoE minutes show that most of the MPC were struggling to make sense of a cocktail of data that lacked a clear direction. I don’t think it was intended to signal a possible return to QE

    Andrew Sentance looked outside of the box, and took what I think is the sensible view. We cannot continue with crisis rates indefinitely, and it is important that borrowers do not make the assumption that ultra low rates are here to stay, and become dependant on that.

    Moreover, inflation is remaining above target, and there is little evidence of excess capacity driving it down.

    I don’t think his view is likely to prevail at the August meeting of the MPC, but we might see one or two more defections to his camp.

    I’d say there is a 50:50 chance of a small rate hike in September, and a very good chance of increases before the end of the year.

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  • Good afternoon,

    I decided to pop back to how things are getting on, and i have noticed many of you are still quoting big words no doubt picked up through college and reading the financial times etc, each trying to prove thier intellect…

    Well despite my advice a number of years ago on here about government intervention etc its seems only now people on here agree there is not going to be an almighty crash in house prices, so you have all now turned into economic specialists and are debating on why interest rates will go up or down with your pretty graphs an big words..

    In simple terms interest rates will bounce along for the next 10 years at least between 0.25 & 3%, only hitting 3% in the later years. It is a matter of inflating our way out of debt, not only that the longer rates stay low the more the economy adjusts (i.e people and businesses) and the harder it becomes to increase.
    Times have changed when many years ago it was a savers society, now it is a credit society and things will change, including the average of base rate. savers will not be happy but unfortunately they are becoming the minority.

    Greenbay

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  • Notyethomeless says:

    Hear hear UT at 4

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  • UT @4 said….

    I’d say there is a 50:50 chance of a small rate hike in September, and a very good chance of increases before the end of the year.

    Agreed. Sort of.

    It’ll be a quarter of one percent – a ‘signal’ sent out to try convincing the consumer that ‘things are returning to normal’ and that it’s ‘safe to spend’
    But it’ll be smoke and mirrors – low interest <1.5% forthe next 5 years methinks, and under 1% for the next two.

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  • I think the BOE doesn’t want to put up rates at any measure for the fear of having to reduce them again.

    Bad for confidence in this long winded, limp recovery perhaps. They seemed to have had the same ‘bad for confidence’ problem when

    things were booming. It’s almost like having a non job but that would depend on ones perspective.

    A case of ahead of the curve or behind it. Curving Mervin indeed.

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  • Babelsbottomlip says:

    no comment.

    recaptcha= bowell unhesitating

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  • When inflation has been more than 5% for 3 years in a row they will raise rates 0.25 Percentage Points. The economy is “fragile” you see.

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  • 6. estrader

    Snap! I liked your version better, even more cryptic. lol

    A little ditty…

    GOD SAVE THE BANKS.
    ===================

    God save our gracious Banks,
    Long live our noble Banks,
    God save them all!
    Send them the bail out tax
    Happy and Prosperous,
    Long to reign over us;
    God save the Banks!
    O Lord our God arise,
    Scatter their enemies
    And make them sure to fall;
    Confound their politics,
    Frustrate their knavish tricks, (that’s rich)
    On Thee our hopes we fix,
    Oh, save them all!
    Thy choicest gifts in store
    On them be pleased to pour; (you ain’t kidding)
    Long may they reign;
    May they defend our laws, (Pardon!?)
    And ever give us clause
    To sing with heart and voice,
    God save the Banks!
    Not in this land alone,
    But be God’s mercies known,
    From shore to shore!
    Lord make the nations see,
    That men should brothers be,
    And form a one sided family,
    The wide world over (Globalisation again?)
    From every latent foe,
    From the assassins blow, (terrorist, terrorism, terror)
    God save the Banks!
    O’er their thine money arm extend,
    For NWOs sake defend,
    Our banksters, elites, and friend,
    God save our Master Banks! (Why?)

    No offence meant and I’m sure none was taken If you know your history. 🙁

    Recaptcha – ‘peasant told’

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