|
Post by Best Mate on Jan 13, 2011 23:27:40 GMT
Rates stay the same again. Personally I am glad just for my mortgage rate but that is just my selfish view as I am on a variable rate and still debating when to move to a fixed rate. If you read lots of different newspaper columns there is a lot of difference in opinion. This was an interesting article. www.ft.com/cms/s/0/e833085c-1f51-11e0-8c1c-00144feab49a.html#axzz1Axai1sLR
|
|
|
Post by Yellow River on Jan 14, 2011 8:05:45 GMT
Rates stay the same again. Personally I am glad just for my mortgage rate but that is just my selfish view as I am on a variable rate and still debating when to move to a fixed rate. If you read lots of different newspaper columns there is a lot of difference in opinion. This was an interesting article. www.ft.com/cms/s/0/e833085c-1f51-11e0-8c1c-00144feab49a.html#axzz1Axai1sLR As I've said before I think the Government's plan is to inflate away as much of the debt as they can whilst keeping wage inflation low. I doubt that we'll see more than a token 0.25 - 0.50% rise in interest rates this year. Don't forget we also have local elections in May, they'll hardly hike rates just before then. It will be interesting to see the minutes of their most recent meeting, will Andrew Sentence be the only one (again) to vote for a rate rise? Which ever way you look at it, rising inflation is really starting to have a big affect on peoples everyday lives.
|
|
|
Post by Yellow River on Jan 14, 2011 8:15:48 GMT
|
|
|
Post by Yellow River on Jan 17, 2011 18:59:27 GMT
For those who take an interest in economics, here is an excellent blog/article from the BBC's Business Editor Robert Peston. www.bbc.co.uk/blogs/thereporters/robertpeston/2011/01/in_the_shadow_of_the_volcano.htmlThis is an extract from it. Similarly, a premature return to normal monetary conditions and normal rates of interest in the UK could wreak havoc on the finances of British households still struggling to manage record levels of personal indebtedness.
There are reasons to hope that we will avoid a double dip back into recession. That said, the weight of debt bearing down on our economy raises the prospect that growth will be relatively anaemic for years, that a return to the 3% per annum enjoyed in the UK during the golden years of 1992 to 2008 may prove elusive.
The big point however is that the imbalances which built up in the financial system and global economy over the 15 years or so till 2007 were so huge (bank lending, for example, that grew out of all proportion to the fundamental needs of the economy) that the process of correction will take years. And in those coming years of returning the financial system to some kind of stable equilibrium, we'll be living in the shadow of a live volcano. And if you've got 15 minutes to spare, this is Peston talking about the current economic situation. I don't pretend to understand it all, but well worth a watch/listen. www.youtube.com/watch?v=r80CiytLWLoI posted at the beginning of this thread that the next couple of years will be tough, how about revising that to the next couple of decades?
|
|
|
Post by Yellow River on Jan 18, 2011 12:37:24 GMT
UK CPI inflation rate rises to 3.7% in December. UK inflation jumped in December with the Consumer Prices Index (CPI) rising to 3.7%, up from 3.3% in November. Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.8% from 4.7%. The rise will put further pressure on the Bank of England to lift interest rates to curb rising inflation. The recent VAT rise from 17.5% to 20% could further fuel inflation, which has now remained above the 2% target by one percentage point or more for 13 months. Prices rose 1% between November and December - a record change between those two months. www.bbc.co.uk/news/business-12214546At what point does a temporary 13 month blip become an upward trend?
|
|
|
Post by Best Mate on Jan 18, 2011 15:48:55 GMT
So do you think their excess money in the economy? Is it a case that people are spending too much and this is driving inflation?
If so, I agree - rates need to rise.
Or is it factors outside of standard spending - inelastic goods such as fuel, higher inflation in China meaning higher consumer prices etc - which are driving the UK consumer prices up. By rising rates - it will not lessen these costs but just squeeze every day people by lessening their capacity to cope with such increases?
|
|
|
Post by Yellow River on Jan 19, 2011 9:39:31 GMT
So do you think their excess money in the economy? Is it a case that people are spending too much and this is driving inflation? If so, I agree - rates need to rise. Or is it factors outside of standard spending - inelastic goods such as fuel, higher inflation in China meaning higher consumer prices etc - which are driving the UK consumer prices up. By rising rates - it will not lessen these costs but just squeeze every day people by lessening their capacity to cope with such increases? It appears to me that the pound has deliberately been devalued/weakened, this in itself make imports more expensive (fuel, food, etc) However I suspect that the continuing rise in inflation is not just down to imported fuel and wheat, VAT rises and quantitative easing has also contributed. It could be argued that raising interest rates will strengthen the pound and make the price of imported goods that we actually need cheaper, thus bringing down inflation. It won't happen though, even a small increase in rates to say 2% (still less than half normal levels) would cause significant falls in house prices, the previous & the current government appear to be determined to prop up house prices at all costs.
|
|
|
Post by Up The Manor on Jan 19, 2011 11:03:47 GMT
|
|
|
Post by amarillo on Jan 19, 2011 11:17:02 GMT
It won't happen though, even a small increase in rates to say 2% (still less than half normal levels) would cause significant falls in house prices, the previous & the current government appear to be determined to prop up house prices at all costs. The problem is too many people took out ridiculous mortgages thinking the boom would last forever. If the government puts rates up, too many people would be shafted. You could argue they deserve it and many others would benefit from a more major house price crash, but thats the dilemma I think the government is facing.
|
|