Interest Rates down to 0.5%!!

I really do not understand the point of lowering rates. As the OP has said his mortgage is nothing, but does the BOE really expect people who fear for their jobs to just go out and spend all their extra cash??

I realise that part of the lowering is to encourage the banks to lend, but if they weren't lending at 1% they won't be lending at 0!
 
RockLobster said:
Nothing. You will still need a good deposit (25%) to get a decent interest and rightly so. Gone are the days of 100% mortgages. House prices will drop to 2002 level.
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So as a first time buyer with a decent deposit, this is relatively good news.

The problem of course is job security, which isn't as good as it used to be for a lot of people.
 
nero120 said:
I really do not understand the point of lowering rates. As the OP has said his mortgage is nothing, but does the BOE really expect people who fear for their jobs to just go out and spend all their extra cash??

I realise that part of the lowering is to encourage the banks to lend, but if they weren't lending at 1% they won't be lending at 0!
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I think that it is meant to help businesses out as well, and hopefully therefore reduce the number of redundancies.

But yeah, I think you're right - this isn't going to change things quickly, as people won't be rushing out to spend all their money. It is going to take a long time for things to improve for most people.
 
aardvark said:
these idiots have no idea what they are doing - massive inflation in the years to come.
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Unless you have done a university course in economics, the bank of england are probably more qualified to think what is correct than you are :p

Good for me tho, my uni loans track at the inflation rate!

Only £5 per £1000 now :D
 
div0 said:
But yeah, I think you're right - this isn't going to change things quickly, as people won't be rushing out to spend all their money. It is going to take a long time for things to improve for most people.
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Agreed, everyone is holding onto their money, including banks. It's a chicken and egg situation, we're just gonna have to ride it out. If quantitative easing doesn't do much, what then?
 
damnit! stuck in a 5.75% fixed rate for another 3 years AND getting bugger all on my savings, great!

And yes I have looked into switching mortgages early, but we calculated it save us £7k, the penalty to get out early is £5k and the fee to setup a new mortgage is £1k, just not worth it :(
 
Concorde Rules said:
Good for me tho, my uni loans track at the inflation rate!

Only £5 per £1000 now :D
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The inflation rate isn't 0.5%, the bank rate is. Student loans are set at the RPI inflation rate at September each year (based on the rate in March) - so it's 3.8% this year. The Government then stepped in and dropped it to 3% after the bank rate dropped hugely.

Still, it's the first time in a while it's probably cheaper to pay it off, as you'd be lucky if your savings get 3%!
 
csmager said:
The inflation rate isn't 0.5%, the bank rate is. Student loans are set at the RPI inflation rate at September each year (based on the rate in March) - so it's 3.8% this year. The Government then stepped in and dropped it to 3% after the bank rate dropped hugely.

Still, it's the first time in a while it's probably cheaper to pay it off, as you'd be lucky if your savings get 3%!
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They dropped to 2.0%
Interest on ICR loans has been reduced to 2.0% effective from the 6th February until further notice.
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http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3866911&_dad=portal&_schema=PORTAL
http://www.slc.co.uk/statistics/facts and figures/index.html
 
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