Interest Rates down to 0.5%!!

FreeStream · 5 Mar 2009 at 12:57

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%!

Well shows how much I know about economics and money

£38 per £1000, still not bad!

And maybe I should pay it off :confused:

GuruJockStrap · 5 Mar 2009 at 13:20

I'm a FTB and arranged a mortgage approx last September. Best rate I got back then was 5.99%.

Since then, interest rates have tumbled but if I was to apply for a mortgage today the best interest rate on a fixed would be around 5.20%. Saving me £40 a month.

I suppose with all the banks losing vast sums of interest due to many on trackers, they've got to make the difference up somewhere.

Glaucus · 5 Mar 2009 at 13:25

6% is still good though.You look at the average since the 2nd world war, 6% is still very very good. Also if you can afford it and you are happy, then it makes little difference what the rate is(if it's fixed).

aardvark · 5 Mar 2009 at 13:26

Concorde Rules said:
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

it should be obvious to everybody that they don't know what they are doing.
what is happening to the global economy could have been (and was) predicted over 10 years ago (some people say 40 years when Bretton woods finally collapsed) - its relatively simple economics.
don't think that the government are doing this for your benefit - they aren't.

Andrew_McP · 5 Mar 2009 at 13:32

Anyone with a flexible mortgage at the moment should be overpaying (if possible!) like there's no tomorrow. At the very least try to pay as much now as you were doing before rates started to fall. This will probably be the best investment you ever make.

As others have said, the world economy (and especially ours!) is well into the "making it up as they go along" phase. Nobody, and I mean nobody, has any idea whether what's happening now is a good idea or the worst idea in 300 years of 'modern' financial history. Some people are just paid to pretend they know.

Andrew McP

Ben M · 5 Mar 2009 at 13:34

Gordon FFS!

a1ex2001 · 5 Mar 2009 at 13:40

Total waste of time, have they learned nothing from watching Japan try and climb out of it's last slump? They also don't seem to realise that quantative-easing doesn't work either, all these measures just seem to be introducing more and more fear into the economy which is jamming it up more and more. Hands up if you feel more secure and able to spend money now than you did yesterday?

AJUK · 5 Mar 2009 at 13:42

We are getting closer and closer to the day it all goes horribly Pete Tong.

I think that Gordon Brown will go down as being the worst PM ever and without doubt the most incompetent politician ever. The sad irony is he is no longer in control of the interest rates (BoE so-called independence was his idea!) and this quantitive easing nonsense will just make things worse.

The UK will become the Zimbabwe of Europe. Will the last person to leave please not bother shutting the door, there is nothing worth nicking and don't bother with the lights either as we would've been cut off by then.

Adsta · 5 Mar 2009 at 13:44

wow........ nice way to get people saving I guess.

This country is becoming quite a joke really

p4radox · 5 Mar 2009 at 13:46

My ISA is seeming less and less meaningful every day. Then again, I only really use it as somewhere to store money, not to earn it.

Rich_L · 5 Mar 2009 at 13:56

Oh noes! Panic! Complain! Do nothing!

nero120 · 5 Mar 2009 at 13:57

p4radox said:
My ISA is seeming less and less meaningful every day. Then again, I only really use it as somewhere to store money, not to earn it.

It's still tax free, what else are you going to do with the money?

Participant · 5 Mar 2009 at 13:57

Andrew_McP said:
Anyone with a flexible mortgage at the moment should be overpaying (if possible!) like there's no tomorrow. At the very least try to pay as much now as you were doing before rates started to fall. This will probably be the best investment you ever make.

As others have said, the world economy (and especially ours!) is well into the "making it up as they go along" phase. Nobody, and I mean nobody, has any idea whether what's happening now is a good idea or the worst idea in 300 years of 'modern' financial history. Some people are just paid to pretend they know.

Andrew McP

Interesting you say that as we've been taking the surplus we've got each month and wacking it into various home improvements, mostly for our own pleasure and benefit. Now we can afford to do all the major things we've wanted to do for the house for a while.

However you've got me thinking about whether we should instead be paying as much as possible on our mortgage, i.e. at least what we were last October.

[TW]Fox · 5 Mar 2009 at 13:58

The interest rates on savings have always been pretty insigificant unless you've got huge amounts anyway.

I mean even at 6% wow thats a whole 600 quid a year interest on £10k. Staggering.

Glaucus · 5 Mar 2009 at 13:59

Robbie G said:
However you've got me thinking about whether we should instead be paying as much as possible on our mortgage, i.e. at least what we were last October.

Or save it, if things carry on getting worse more people could start losing there jobs.

p4radox · 5 Mar 2009 at 14:00

nero120 said:
It's still tax free, what else are you going to do with the money?

No no, I actually agree. My first reaction was "oh no I'm earning even less interest", but then I came to my senses and realised just how little I was earning in the first place...

Participant · 5 Mar 2009 at 14:01

AJUK said:
We are getting closer and closer to the day it all goes horribly Pete Tong.

I think that Gordon Brown will go down as being the worst PM ever and without doubt the most incompetent politician ever. The sad irony is he is no longer in control of the interest rates (BoE so-called independence was his idea!) and this quantitive easing nonsense will just make things worse.

The UK will become the Zimbabwe of Europe. Will the last person to leave please not bother shutting the door, there is nothing worth nicking and don't bother with the lights either as we would've been cut off by then.

Now that, is the most alarmist post I've read on these forums for quite a while

.

Firstly as much as I dislike Gordon Brown, it's not all his fault. The fact that he is not in control of interest rates is a good thing, and when the system was implemented it was hailed as the best economic move the UK has made for a very long time. Gordon Brown is still a highly respected economist, and although he has made some blunders, name me a single human being that hasn't. It's just that the macro eonomic factors inflated the consequences of those blunders.

The Zimbabwe of Europe - I don't know what to say about that except for, what do you mean?

Bhoya · 5 Mar 2009 at 14:03

AJUK said:
I think that Gordon Brown will go down as being the worst PM ever and without doubt the most incompetent politician ever.

I quite agree that GB is a plank of the highest order but I'd put Tony Blair up there with him, if anything he's worse. By jumping just before the headlines started (although most people could see it coming) he's managed to avoid most of the bad press for what has been his responsibility as PM and he can continue to milk the profits of the ex-PM circuit.

a1ex2001 · 5 Mar 2009 at 14:06

[TW]Fox;13622711 said:
The interest rates on savings have always been pretty insigificant unless you've got huge amounts anyway.

I mean even at 6% wow thats a whole 600 quid a year interest on £10k. Staggering.

So I guess if your boss offered you a £600 a year pay rise you'd say don't bother it's not worth the hastle?

Also given that the avergae uk person has over 17K in savings what you have essentially said is it is insignificant that the average uk person has seen there yearly income drop by a potential 1.5K a year?

Robbie G said:
Gordon Brown is still a highly respected economist

Gordon Brown is an economist? I thought he was a professional politician with a degree in Histroy and a PhD which was titled 'The Labour Party and Political Change in Scotland 1918-29' but obviously I was wrong and he is actually a financial expert.

Glaucus · 5 Mar 2009 at 14:06

Bhoya said:
I quite agree that GB is a plank of the highest order but I'd put Tony Blair up there with him, if anything he's worse. By jumping just before the headlines started (although most people could see it coming) he's managed to avoid most of the bad press for what has been his responsibility as PM and he can continue to milk the profits of the ex-PM circuit.

GB is worse, remember he was the chancellor in TB rain.