Interest Rates Down to 2%

[dirtydog]

I just checked the exchange rate, it's now down to around $1.46 to the pound !!! What i wanted to buy from the states has now gone up from around £75 to £110.

Swings and roundabouts. In the recession of the early 1990s we didn't start to come out of it until the pound fell in value. People need to understand that a 'weak' pound isn't necessarily bad for the country.

 

[HEADRAT]

So glad I have most of my savings in a bond fixed at 7% and a regular saver at 10%

So just out of interest how much do you have saved?

Do you have a mortgage?

 

[sven256]

Swings and roundabouts. In the recession of the early 1990s we didn't start to come out of it until the pound fell in value. People need to understand that a 'weak' pound isn't necessarily bad for the country.

Ummm

When you are a major exporter, and have vast resources, I would agree. We are none of these. So please explain

We are predominately a importer these day, who lives off its previous wealth. So a weaker pound would equal higher inflation (due to we are a importer) thus weakening us even more.

 

[csmager]

*ignore*

 

[zytok]

.54% above base for my mortgage, £150/month less than it was around a year ago......

 

[ironman]

Well I just increased my savings by 5.6% in a few hours thanks to the 12pm announcement

 

[scorza]

Ummm

When you are a major exporter, and have vast resources, I would agree. We are none of these. So please explain

We are predominately a importer these day, who lives off its previous wealth. So a weaker pound would equal higher inflation (due to we are a importer) thus weakening us even more.

We import more than we export, but we are still a major exporter - and as the value of the pound falls, we will export more and import less.

Inflation is dropping fast. The danger now is deflation.

 

[NeilF]

We are watching the slow, painful death of the pound and the UK economy. Pay attention, this is something you'll be able to tell your grandchildren about.

Andrew McP

Maybe it's time for that one way trip to Vancouver now!

 

[gord]

How does this help people without mortgages but with cash to save?

 

[dirtydog]

How does this help people without mortgages but with cash to save?

Directly, not at all. Indirectly it helps us if it improves the health of the economy.

 

[NeilF]

Mines due in april, I'm obviously going to see an adviser but surely this time around it's going to be damn tempting to get a locked rate for 5 years?

Normally I just do it for 2 years.

Yeh, but the banks, now with their fingers burned, will not be offering nice low long term rates!

First Direct were offering a variable rate 0.99 above base rate... It's now been taken away

I suspect to get a new deal, you'll be lucky to even get below 4%!

 

[Luseac]

Sigh... my savings are going to earn even less now.

Just hope all this money mortgage holders are saving gets spent on the highstreet to help the economy.

 

[Admiral Huddy]

take the tracker with you and then get a second mortgage for the extra

Are you taking about hedged mortgages?

 

[sven256]

We import more than we export, but we are still a major exporter - and as the value of the pound falls, we will export more and import less.

Inflation is dropping fast. The danger now is deflation.

I can regurgitate what I hear on the news. But in reality this is all spin for me, I can not see us recovering from this.

I can not name one thing that we are known for exporting these days. And what we do export seems to be shrinking fast.

As for lowered inflation / deflation I can see this as only a short term thing, due to the rest of the world feeling the effects of the major powers not buying. Once the buying picks up again the prices will rise again. But with a weaker pound, we are not going to get as much for our money.
And I can see the pound not recovering as much as the rest of the world.(just my view)
And yes I am aware the pound for the last few years has been unusually high against the us dollar. But we have fallen against most currencies, where we should not of been falling.

 

[platypus]

Whilst the banks won't rush to pass on any cuts to borrowers, I think it's likely they won't rush to cut rates for savers too.

They will use this as an opportunity to try and restore their profits and cash reserves; something they can't do if they push savers away.

 

[Mr C]

I can not name one thing that we are known for exporting these days. And what we do export seems to be shrinking fast.

Most of our major exports are pharmaceutical, manufactured products (Aerospace equipment, cars, electronics) and plastics.

 

[Indy500]

Most of our major exports are pharmaceutical, manufactured products (Aerospace equipment, cars, electronics) and plastics.

Yet manufacturing employs less than 10% of the total workforce (2.86 million), and thats lower than the public sector staff (the NHS is the largest overall employer in the UK, with 7% alone )...

 

[sven256]

Most of our major exports are pharmaceutical, manufactured products (Aerospace equipment, cars, electronics) and plastics.

Aerospace equipment, cars are in decline but I will agree with the others

http://news.bbc.co.uk/1/hi/business/7739026.stm just as a example

And I'm sure you know how the car industry is in this country at the minute.

 

[Ben M]

well that's annoying.

 

[Scam]

Directly, not at all. Indirectly it helps us if it improves the health of the economy.

By encouraging people to spend? That's the idea, isnt it? I cant see it happening. Savers are furious, intent on getting the best rates by (probably) locking up their money in fixed-rate accounts. No spending there. People with mortgages are mostly saying they will overpay. I cant see either scenario helping the economy.