Bank of England cuts interest rate

[Haircut]

This is going to do wonders for reducing the debt that has caused so many problems recently.

 

[Sankari]

How much of this will the banks pass on to the punters?

Australia cut her base rate by 1%; I'd say that's the figure we should be aiming for in the UK.

 

[Booner!]

Great, so I loose money by saving and avoiding debt?

 

[LordSplodge]

LIBOR will still be high as banks don't trust anybody so it won't do much good.

 

[LiE]

Great, so I loose money by saving and avoiding debt?

You don't lose anything, just gain less.

 

[GFiSH]

Not great for me as I don't have any debt, but am thinking about getting a loan shortly so might hold out for a better rate.

 

[N9ne]

I'm not too worried about inflation as ~5% isn't too high, we've seen much worse. Furthermore, commodity prices have retreated significantly due to demand factors.

 

[G-MAN2004]

Great, so I loose money by saving and avoiding debt?

You're not losing anything.

 

[Morba]

Just for xmas, get people spending again for xmas, then raise it again in Jan.

 

[Energize]

*Watches inflation rocket past 5%*

Welcome to new Zimbabwe.

You don't lose anything, just gain less.

He loses to inflation.

 

[Third Opinion]

So the Government target of 2% inflation no longer matters then?

We are running at close to 5, and expected to go beyond this.

 

[Morba]

So the Government target of 2% inflation no longer matters then?

We are running at close to 5, and expected to go beyond this.

thats the government target, not the BOE (which is supposedly independent)

 

[Slinwagh]

So the Government target of 2% inflation no longer matters then?

We are running at close to 5, and expected to go beyond this.

What other choice was there, let the banks collapse?

This is a world problem but people seem to be placing the blame at the foot of Gordon Brown.

 

[Energize]

What other choice was there, let the banks collapse?

Well if interest rates were increased, people would be more willing to save, giving the banks more money.

 

[Slinwagh]

Well if interest rates were increased, people would be more willing to save, giving the banks more money.

But lots of people are mortgaged to the hilt, have loans and large balances on credit cards, how do they save?

 

[scorza]

So the Government target of 2% inflation no longer matters then?

We are running at close to 5, and expected to go beyond this.

What do you know to expect it to rise? Most commentators are expecting inflation to start falling before the end of the year, probably even after this interest rate cut.

 

[scorza]

Well if interest rates were increased, people would be more willing to save, giving the banks more money.

And more people wouldn't be able to pay back their loans, making the banks lose a helluva lot of money and possibly go bust.

 

[Kemik]

So the Government target of 2% inflation no longer matters then?

We are running at close to 5, and expected to go beyond this.

Targets sort of go out of the window when you enter a economic climate not seen for over 50 years.

 

[Energize]

But lots of people are mortgaged to the hilt, have loans and large balances on credit cards, how do they save?

They go bankrupt for their bad financial planning while the sensible savers are rewarded. The savings situation has got so desperate that the boe have had to guarantee upto £50k to get people to save, which has caused shares in major banks to fall even further.

 

[mangobreeder]

LIBOR will still be high as banks don't trust anybody so it won't do much good.

this will come down now the govt are covering Interbank lending.