Mortgage Rate Rises

Mercenary Keyboard Warrior said:
The FSCS is per banking group not per "highstreet" bank so you need to avoid placing large amounts with multiples within the same group

Unless they have recently changed it that is
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I think it is still per banking group. Luckily, there are quite a few of these lesser-known banks that aren't tied. So for anyone holding less than £1M total, it's easy to spread it out.
 
Slam62 said:
Well this is the issue isn't it, the decision is stupid, inflation as they understand it is caused by an economy flush with money pushing up prices, but that is just not the case this time. It really beggars belief, inflation caused by global demand is not going to be controlled by UK interest rates.

Actually, the real reason is to shore up the pound and maintain confidence in the pound, if that is the case, there is a lot more pain to come.
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There's multiple reasons why rates are increasing. They had to increase at some point anyway and start to normalise. The long term average interest rate is around 5%, and this is likely where they are headed, maybe a bit more.

You also have to consider that it is not just the UK that is increasing interest rates. All major central banks are in the hiking cycle. Higher interest rates will actually cause demand destruction which will in turn bring inflation down. There are still far too many people out there with Covid cash left over, but once that is finally flushed out, it's game on.
 
purplesky said:
There's multiple reasons why rates are increasing. They had to increase at some point anyway and start to normalise. The long term average interest rate is around 5%, and this is likely where they are headed, maybe a bit more.

You also have to consider that it is not just the UK that is increasing interest rates. All major central banks are in the hiking cycle. Higher interest rates will actually cause demand destruction which will in turn bring inflation down. There are still far too many people out there with Covid cash left over, but once that is finally flushed out, it's game on.
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Indeed, but we also have huge markets expanding as fast as they can, China and India, world resources are finite so prices must go up.
The UK had north sea oil but Maggie gave all the profits away, we need to be at least self sufficient for energy which means nuclear power or we need to be a wealth generating powerhouse so we can afford to buy energy.
If you don't have massive aggressive military power or abundant natural resources it's quite difficult for a relatively small country to hold its own.
 
Slam62 said:
Pretty sure this isn't the case, I believe it is per brand.
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It never was and according to the BOE it still isnt

"The deposit protection limit applies to the total eligible deposits of each person, per PRA-authorised firm. So for deposits in a joint account, this means that each account holder is protected up to the deposit protection limit, ie the total protection adds up to two times £85,000.
A PRA-authorised firm may own several banking and building society brands. This means that anyone who has deposits in more than one account under a single brand, or multiple accounts under different brands owned by a single firm, is only protected up to a total of £85,000 across all these accounts."


The most obvious one that people should avoid would be Halifax and Bank of scotland who share the PRA code, but there are others there
 
Slam62 said:
Indeed, but we also have huge markets expanding as fast as they can, China and India, world resources are finite so prices must go up.
The UK had north sea oil but Maggie gave all the profits away, we need to be at least self sufficient for energy which means nuclear power or we need to be a wealth generating powerhouse so we can afford to buy energy.
If you don't have massive aggressive military power or abundant natural resources it's quite difficult for a relatively small country to hold its own.
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If only we hadn't left an organisation that via pooling in effect gave us far more weight than we deserved :(
 
Mercenary Keyboard Warrior said:
It never was and according to the BOE it still isnt

"The deposit protection limit applies to the total eligible deposits of each person, per PRA-authorised firm. So for deposits in a joint account, this means that each account holder is protected up to the deposit protection limit, ie the total protection adds up to two times £85,000.
A PRA-authorised firm may own several banking and building society brands. This means that anyone who has deposits in more than one account under a single brand, or multiple accounts under different brands owned by a single firm, is only protected up to a total of £85,000 across all these accounts."


The most obvious one that people should avoid would be Halifax and Bank of scotland who share the PRA code, but there are others there
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Oh dear
 
wouldn't it have been better to build more nulear power stations than HS2?

i'm not sure how much a power station costs to build though, but iirc HS2 is up to around £92 billion

:edit: The cost of building the UK’s first new nuclear power plant in a generation has risen by up to £2.9bn and the total bill could be more than £22bn

so we could have had 4 new plants :rolleyes:
 
TheOracle said:
wouldn't it have been better to build more nulear power stations than HS2?

i'm not sure how much a power station costs to build though, but iirc HS2 is up to around £92 billion

:edit: The cost of building the UK’s first new nuclear power plant in a generation has risen by up to £2.9bn and the total bill could be more than £22bn

so we could have had 4 new plants :rolleyes:
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Yeah but that would need successive governments that actually new what they were doing unfortunately we have a bunch of squabbling clowns.
 
purplesky said:
Flushing out zombie companies that have been on life support since 2008 is a good thing in the end. Why waste even more money keeping them afloat? People working for those companies will of course lose their jobs - it happens unfortunately.

Low interest rates encourage reckless lending/behaviour. Those living outside their means will feel it the most.

The problem the central banks have today is tightening into a recession. They got us into this mess in the first place with QE and emergency interest rates since 2008. Anyone half switched on should have seen the train lights in the distance getting closer.
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And high interest rates put people on the streets...

Is the recession a global one?
 
jonneymendoza said:
And high interest rates put people on the streets...

Is the recession a global one?
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No idea, but we've had a few, I am just gobsmacked that the boe think it's acceptable to say there will be a recession while at the same time proudly putting rates up and saying that inflation will go up.
If you get a recession but rising inflation you are in big trouble.
 
jonneymendoza said:
And high interest rates put people on the streets...

Is the recession a global one?
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People who can no longer service their debt are going to be on big trouble. However, this has always been the case. Nobody forced these people to sign on the dotted line.

The recession is indeed global. As much as I really don't like central bankers like Andrew Bailey, he was saying it the way it is today.
 
Slam62 said:
No idea, but we've had a few, I am just gobsmacked that the boe think it's acceptable to say there will be a recession while at the same time proudly putting rates up and saying that inflation will go up.
If you get a recession but rising inflation you are in big trouble.
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BOfE only doing what it had to do. Both the US Fed and European ECB have started a tightening cycle accompanied by raising rates. The BOfE are mirroring the response as expected.
 
omnomnom said:
100k left on my mortgage on 2.4 % and fixed till March 2024 so im in an ok ish position.
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That's only 2 years away! What will rates be then?
I'd be looking to overpay as much as i can in those 2 years. This calculator is an eyeopener:

www.moneysavingexpert.com

Mortgage Overpayment Calculator: Pay off your debt early?...

Mortgage Overpayment Calculator shows how much you can save by paying off your mortgage early - if your mortgage allows overpayments.
www.moneysavingexpert.com www.moneysavingexpert.com
 
And incase anyone was in any doubt, no bank, central or other care whether someone can pay their mortgage. They're already in really good shape thanks the bailouts of 2008, and can weather the storm ahead.
 
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