Interest Rates Take Effect

#2
I don't know Sven. Or really care for that matter.
Why don't you try a economics website instead?
 
#3
gennithmedic said:
I don't know Sven. Or really care for that matter.
Why don't you try a economics website instead?
Well, he has posted it in the "Current Affairs, News and Analysis" part of the site you knob.
 
#5
gennithmedic said:
I don't know Sven. Or really care for that matter.
Why don't you try a economics website instead?
I suggest that it does matter for those of You with a mortgage - if interest rates go just a little bit higher then many down south may not be able to afford their mortgages.

If lots of people try to sell their houses all at once and noone can afford the interest rates and so cannot buy then prices drop - I suggest that would be relevent to most on here
 
#6
Sven said:
Inflation fell by three points to 2.8% , should interest rates drop now?

Article here
I doubt it. As the inflation rate is only .2% away from its upper limit it won't be safe for the Bank of England to cut it just yet. May even be a case for another raise.

Please remember that the current interest rate of 5.5% is not that high compared to the average over the past few decades.
 
#7
Vimeiro said:
Sven said:
Inflation fell by three points to 2.8% , should interest rates drop now?

Article here
I doubt it. As the inflation rate is only .2% away from its upper limit it won't be safe for the Bank of England to cut it just yet. May even be a case for another raise.

Please remember that the current interest rate of 5.5% is not that high compared to the average over the past few decades.
Quite true - but You have to take into effect that people maxed out on their martgage because house prices are so high. That means that smaller interest rate rises impact harder than in previous years therefore having the same effect
 
#8
Sven said:
Vimeiro said:
Sven said:
Inflation fell by three points to 2.8% , should interest rates drop now?

Article here
I doubt it. As the inflation rate is only .2% away from its upper limit it won't be safe for the Bank of England to cut it just yet. May even be a case for another raise.

Please remember that the current interest rate of 5.5% is not that high compared to the average over the past few decades.
Quite true - but You have to take into effect that people maxed out on their martgage because house prices are so high. That means that smaller interest rate rises impact harder than in previous years therefore having the same effect
It's true that the Bank of England don't want to precipitate a market crash, but neither with public borrowing already at record levels do they want to encourage more spending. On balance I think that a small rise is still the most likely outcome.
 
#9
Simple answer is No.

Even if the trend is downwards, if the PTB are serious about changing the populations view on debt and the need to save, both problematic areas, interest rate should stay where they are until at least the next review, IMHO.

edited once for clarity
 
#10
Sven said:
Vimeiro said:
Sven said:
Inflation fell by three points to 2.8% , should interest rates drop now?

Article here
I doubt it. As the inflation rate is only .2% away from its upper limit it won't be safe for the Bank of England to cut it just yet. May even be a case for another raise.

Please remember that the current interest rate of 5.5% is not that high compared to the average over the past few decades.
Quite true - but You have to take into effect that people maxed out on their martgage because house prices are so high. That means that smaller interest rate rises impact harder than in previous years therefore having the same effect
That all depends on if you deem the current market as too high.

If you take the market from 10, 20 and 30 years ago, how much of a households income is spent on a mortgage? May not be that different than today. Have a look at this link

The current situation IMHO is people believing that interest rates will stay low and have not thought what would happen if interest rates rose to the level that they traditionally are in this country.
 
#11
Not having a mortgage I do not know at what point interest rates will have a negative effect on housing equity. Can anyone inform me please?
 
#12
Sven said:
Not having a mortgage I do not know at what point interest rates will have a negative effect on housing equity. Can anyone inform me please?
Don't think it quite works like that, Sven. It pretty much acts as a tipping point in conjuction with other debts. I had a quick look at all the previous posts about rates in the past. The biggest difference between then and now are all the additional debts that people have these days.

20 years ago, you had a mortgage (2-3 times earnings) and an overdraft. These days you have a mortgage (up to 8x earnings, FFS), credit cards up the ying-yang and credit agreements for far far more and the overdraft on top. Far more precarious.

Currently, house prices are still going up. I think I saw one report saying 1.1% for last month. If this was a linear equation/comparison, rates probably have a way to go to match and make the market meet your negative effect on equity remark.

However, take everything else in to consideration and I don't think you are too far off a world of hurt and at the minimum, a population learning to be less frivolous with its money.
 
#13
in_the_cheapseats said:
However, take everything else in to consideration and I don't think you are too far off a world of hurt and at the minimum, a population learning to be less frivolous with its money.
With other peoples money.
 
#14
Vimeiro said:
in_the_cheapseats said:
However, take everything else in to consideration and I don't think you are too far off a world of hurt and at the minimum, a population learning to be less frivolous with its money.
With other peoples money.
Agreed but hopefully their own too :D
 
#15
Well, I still think that it is only News and Current Affairs if it involves throwing lead wasps at people.

Oh God of battles! steel my soldiers' hearts;
Possess them not with fear; take from them now
The sense of reckoning,
and let them not give a facking monkey b0ll0ck about macro economics.
 
#16
I will be signing papers next thursday on a huge huge mortgage - infact its 6 times the amount I had on my first mortgage 13 years ago, am I bothered about interest rises - the simple answer is NO. Why you ask, I shall tell you...

I Live within my limits
I Spend what I have, not what I dont (mortgage aside that is)
I Save
I Planned for my future
As soon as I use my credit card I ensure its paid off within that month or near as damn it.

I am not a rich man, I didnt start saving until I was 27 and I am now 43. But wished even so that I had saved earlier.

My mortgage is a huge burden but because I listened to those who knew better than I thought I did, I know I can have my mortgage paid off in around 7 years from now.

You may think that I am now stuck indoors but I have 2-3 major hols a year, go and do what I wish when I want, ALL down to planning. It can be done without the geek tag
 

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