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So it's a 0.5% cut. What's the point?!
Bank of England : Rate Drop!
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Soldato
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No they won’t, and apparently Nationwide have something written into the majority of variable rate mortgage customers that if interest rates drop below a certain threshold any drops don't get passed on. That threshold has been and gone irc.
I think they should look at other options before lowering rates further. They're beginning to look desperate and out of ideas.
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0.5% of a lot is.. a lot.
Soldato
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print money / add a few 000s is the next plan.
Man of Honour
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There is absolutely no point in any more interest rate cut's. The banks are saying that they will not pass them on to borrowers. They are quick enough to cut them for savers though. All this is doing is shafting people who have actually bothered to save money. If you have a credit card you won't see your rates come down either. The banks still will not lend to people and businesses. It benefit's no-one except the banks. Seriously, what's the point?
Indeed, being careful with my money is not benefitting me atm.
I dont know anyone who is benefitting from any of this. I'm losing because i rent and have savings, same as my girlfriend. Are savers even getting the rate of inflation anymore?
We'll just carry on paying the same amount of rent as last year whilst losing a shedload of money, shall we? It's not like landlords are cutting rent. My mum has a heap of money from when she and my dad split and sold the house (she's looking to buy) and last month the interest she gets from that dropped by almost £300. She's now been made redundant and probably wont get any help (because she has 'savings') and so will be living on £300 less a month than she was used to. Brilliant. Good one Brown you absolute ******.
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Yep, shaft savers (who are losing money considering Inflation > the majority of savings interest rates) to help out the idiots who got themselves into too much debt, Great.
Lucky for me I'm getting 6.125% on the majority of my savings for another ~6 months, by then if all things go well we'll be into the soaring inflation stage of gordon's plan to screw over the country and interest rates will be nice and high again \o/
Only problem with that is that high inflation helps out the idiots yet more (debt is realistically worth less), I'd rather they suffered some, a good chunk of deflation would do me tbh
Lucky for me I'm getting 6.125% on the majority of my savings for another ~6 months, by then if all things go well we'll be into the soaring inflation stage of gordon's plan to screw over the country and interest rates will be nice and high again \o/
Only problem with that is that high inflation helps out the idiots yet more (debt is realistically worth less), I'd rather they suffered some, a good chunk of deflation would do me tbh
The end user isn't the be all of the economy. If the banks are making profits because of the interest rate cuts, it will (eventually) make it's way into peoples pockets. The rate cuts by the BoE are there to put money into the market, and not in the BoE's coffers or back to the countries/banks this country has borrowed from.
Why oh why do so many people think the economy stops at how much cash they have in their pocket? It's more than that. Much more.
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You're missing my point.
The economy was broken when IRs were 5%. THey've reduced it multiple times and the economy is still broken.
Reducing IRs will NOT help. The population is debt ridden and do not want to spend because they are terrified they'll lose their jobs and won't be able to repay what they have now.
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It is, but they only look at it from their perspective and don't consider the wider picture.
That's why the population was so content when the housing bubble inflated, there was a general perception of wealth which was, of course, absolute balls.
You're missing THE point.
The economy does not get, has never been, and will never be fixed overnight. The rate drop will stop the BoE taking as much money from the market as it did before, which means there will be more money to keep paying those staff, so they won't need to be as terrified of losing their jobs.
Part of the reason that interest rates are so low is the risk of deflation, so I don't know why savers are getting in a tizzy that their savings are not earning as much, if we get into a period of deflation even savings with 0% interest will technically still be better off.
Keep the cuts coming (I think we have at least another 1% to go).
Equity markets will probably react pretty flat to this news - FX markets will be interesting, although the cut will obviously weigh on the GBP, there's a lot of talk of a downward fall for the dollar which maybe more significant - this will be good for commodities particularly gold, silver etc. Interesting times!
Equity markets will probably react pretty flat to this news - FX markets will be interesting, although the cut will obviously weigh on the GBP, there's a lot of talk of a downward fall for the dollar which maybe more significant - this will be good for commodities particularly gold, silver etc. Interesting times!
This is valid as far as I know - many people here, myself included, have never known anything but growth and spiralling house prices.
When savings are gaining 1.5% interest but inflation is actually deflation of 2%, thats a net improvement of 3.5% (roughly speaking).
Just that it takes even people like me a while to get my head around it - my savings are currently too small to be significant, though I am moving my ISA out of HSBS's pitiful 1.8% rate... and my mortgage is fixed for the next 3.5 years so it matters not 1 bit.
Ah well, least I have no credit card debt or loans anywhere else