Bank England interest rate
- Thread starter Rooky007
- Start date
Agreed but the low rate came in at the right time for some to get on the property ladder. I'm prepared for a rise but not something I'm enthusiastic about.
[TW]Fox;18728821 said:
It really is quite crazy that many people appear to be struggling when rates are at a 300 year low.
The problem with the 'fill your boots when interest rates are low' attitude also means that unless there is a period of wage inflation those that are struggling now are still going to be struggling for a while.
Same.
I budgeted for the affordability of my mortgage for up to 10%. I plan to have cleared it well before we see 5/6%.
I don't doubt that the first small rise in the BR will result in people panic buying/switching to fixed rates.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Which is the problem - it shouldn't have been a cue to judge affordability because it was never going to last for ever
Soldato
I have been still paying mortgage circa the rate I took it out at 5.5% so as long as it stays under that I am still overpaying.
Soldato
Man of Honour
Whilst talking about the BoE - they've issued a statute that £5 notes need to be circulated more as several £bn are held in vaults and cash processing centres losing value and costing the banks - so expect to see them back in ATMs soon!
Sorry I realise it's totally unrelated - but just thought it would be quite interesting.
Sorry I realise it's totally unrelated - but just thought it would be quite interesting.
Soldato
Im guessing base rate will be 1% by august review.
Either 2x 0.25% rises or one 0.5% one.
Will be 1.5%-2% by end of 2011 and 3% by end of 2012
Problem is I am not convinved it will make as big a diff as it should to inflation, so much of the inflation is fuel driven, putting up raw mats which puts up finished goods cost plus distribution. I dont see that changing, ie I think we will have quite significant fuel inflation for a while.
With people already struggling I don't see the impact of the higher interest rates stopping job public spending much, its not like most are really going bonkers on plastic etc. It will potentially hurt some smaller businesses, even bigger businesses that are debt heavy and could lead to some more staff cutting etc to balance books.
Interest rates help to cool an economy thats overheating due to consumer spending, thats not really whats pushing our inflation right now.
Either 2x 0.25% rises or one 0.5% one.
Will be 1.5%-2% by end of 2011 and 3% by end of 2012
Problem is I am not convinved it will make as big a diff as it should to inflation, so much of the inflation is fuel driven, putting up raw mats which puts up finished goods cost plus distribution. I dont see that changing, ie I think we will have quite significant fuel inflation for a while.
With people already struggling I don't see the impact of the higher interest rates stopping job public spending much, its not like most are really going bonkers on plastic etc. It will potentially hurt some smaller businesses, even bigger businesses that are debt heavy and could lead to some more staff cutting etc to balance books.
Interest rates help to cool an economy thats overheating due to consumer spending, thats not really whats pushing our inflation right now.
Soldato
Whilst talking about the BoE - they've issued a statute that £5 notes need to be circulated more as several £bn are held in vaults and cash processing centres losing value and costing the banks - so expect to see them back in ATMs soon!
Sorry I realise it's totally unrelated - but just thought it would be quite interesting.
Yes and the ones that currently go round circulate fast but rarely get into the banking system to be replaced by better less tatty ones. More £5 notes will help to see the ones that are tatty going through the system more and therefore getting replaced faster.
Must admit I find a fiver a great balanced note. Its perfect for shoving in your pocket when you know your buying a sarnie or something as your change will be minimal. A tenner is great until you get given like 6-7 quid change in coins.
[TW]Fox;18728956 said:Which is the problem - it shouldn't have been a cue to judge affordability because it was never going to last for ever
It depends on what budgeting you have done beforehand and how much foresight you have. As some have already said it has provided the opportunity to overpay which is never a bad thing. I don't regret buying a house, I'd rather be paying my own mortgage instead of someone elses even if it means watching what I spend in other areas.
That is good news about the five pound note, bring it on.
Associate
This kids don't know how good they have it today. 15% in the early 80's was no joke.
Man of Honour
Nationwide have already started, TPF will start after Easter - other banks will follow soon.
The trouble is, inflation at the moment isn't being driven by an increase in the money supply, but by external factors the BoE has no control over (VAT rises, commodity/raw material increased demand, unrest in the Middle East)... putting interest rates up won't affect the rate of inflation at the moment.
I think there is a lot in that, there are several things that are contributing to higher inflation which are likely to be short term, next year inflation will start to drop whether that will be too little or too late who knows. the BoE are concerned about any significant rate increase harming what bit of a recovery we have
External cost factors directly affected by the low value of sterling, something alleviated by... higher interest rates?