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Bank of england to announce biggest hike on interest rates for 33 years.
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By *hagTonight OP Man
over a year ago
From the land of haribos. |
The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be?  |
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By (user no longer on site)
over a year ago
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"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be? "
They will raise interest rates |
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By *irldnCouple
over a year ago
Brighton |
They’ll keep raising interest rates until they finally realise inflation is not being caused by consumer demand/spending and belatedly realise they have tanked the economy and will back peddle furiously to get businesses investing again. IMHO |
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By *hagTonight OP Man
over a year ago
From the land of haribos. |
"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be?
They will raise interest rates "
Yes, they will do that too. |
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By *hagTonight OP Man
over a year ago
From the land of haribos. |
"They’ll keep raising interest rates until they finally realise inflation is not being caused by consumer demand/spending and belatedly realise they have tanked the economy and will back peddle furiously to get businesses investing again. IMHO"
Yes, they will, is there a limit when they cant increase it anymore?
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By (user no longer on site)
over a year ago
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"They will raise interest rates, hopefully by a fairly hefty amount.
The Bank of England has been way too slow to tackle inflation."
That will be great for my savings  |
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By *ercuryMan
over a year ago
Grantham |
"They will raise interest rates, hopefully by a fairly hefty amount.
The Bank of England has been way too slow to tackle inflation."
Should have followed the US months ago. Too slow on the uptake. |
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By *ackal1Couple
over a year ago
Manchester |
"They’ll keep raising interest rates until they finally realise inflation is not being caused by consumer demand/spending and belatedly realise they have tanked the economy and will back peddle furiously to get businesses investing again. IMHO"
I have to agree with this. All I can see is a sledge hammer approach which isn’t needed due to people already cutting back and in my opinion it will cause unnecessary additional damage. |
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"They’ll keep raising interest rates until they finally realise inflation is not being caused by consumer demand/spending and belatedly realise they have tanked the economy and will back peddle furiously to get businesses investing again. IMHO
I have to agree with this. All I can see is a sledge hammer approach which isn’t needed due to people already cutting back and in my opinion it will cause unnecessary additional damage. "
Totally disagree, Andrew Bailey is an idiot and as others have said we should have raised rates last year like the USA.
The rates are not high, the average rate between 1997 and 2007 before the crash was 5.4%. Even if you pick other times like 1952 to 69 average rate was 5.6%. |
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By *ackal1Couple
over a year ago
Manchester |
"They’ll keep raising interest rates until they finally realise inflation is not being caused by consumer demand/spending and belatedly realise they have tanked the economy and will back peddle furiously to get businesses investing again. IMHO
I have to agree with this. All I can see is a sledge hammer approach which isn’t needed due to people already cutting back and in my opinion it will cause unnecessary additional damage.
Totally disagree, Andrew Bailey is an idiot and as others have said we should have raised rates last year like the USA.
The rates are not high, the average rate between 1997 and 2007 before the crash was 5.4%. Even if you pick other times like 1952 to 69 average rate was 5.6%. "
I agree with your point they should have been raised sooner ie years ago but at this precise moment they will just pour more misery on very depressed economy. To use interest rates at this point in a negative that I feel the country doesn’t need.
Business funding will be increasing when they are having to contend with ridiculous energy prices along with a shortage of labour and increased export costs for those that export.
We are already in a bad way and this will only benefit those with large savings .
Those who sped to keep the economy moving day to day will reduce that spending even more.
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"We are already in a bad way and this will only benefit those with large savings ."
It won't exactly benefit them, more just ease the pain slightly.
Inflation is at around 10%, and savings rates are currently at about 5%. Those with savings are seeing them get less valuable by the day. A rise of 0.75% won't help out savers that much, and there's no guarantee the banks will even pass it on. |
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By *ackal1Couple
over a year ago
Manchester |
"We are already in a bad way and this will only benefit those with large savings .
It won't exactly benefit them, more just ease the pain slightly.
Inflation is at around 10%, and savings rates are currently at about 5%. Those with savings are seeing them get less valuable by the day. A rise of 0.75% won't help out savers that much, and there's no guarantee the banks will even pass it on."
Notice I said large savings .
If you have seven figures in the bank food inflation isn’t really an issue. |
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By *eroy1000Man
over a year ago
milton keynes |
"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be? "
It seems to be the accepted way of doing things all over. Both America and ECB are doing the same. America much more aggressively so far but apparently will slow the rate of rises. Japan seem to have gone a different route but still having other problems. I think there are some other smaller countries that have not raised rates either but their inflation has gone crazy. It's a conundrum |
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Hubby took a look at the historical changes the BoE has done to interest rates. Going back as far as their records go, 1975, they have never ever made a rate increase over 1%. Stop panicking and being lead like sheep by media.
Anybody with half a brain should know it's not normal for rates to have remained so low, which they did as an answer to the financial crisis. We all knew they'd have to go up eventually and eventually now here. |
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By *abioMan
over a year ago
Newcastle and Gateshead |
0.75 it is… however interesting notes..
Expect the next 8 quarters will be in recession…
Expecting interest rates to top out at 5.25%… with this rise we are now up to 3%
Inflation now expected to top out at 11% ……
A few things here….
1) the bank are kinda flying blind here.. since the autumn statement isn’t for 2 weeks
2) this would have been a lot….lot worse if trussonomics had been in place! If truss had still been in charge you may have been looking at a 2% rise!
Under truss… inflation was looking at topping out at 13.5% and interest rates at 6.25% |
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By (user no longer on site)
over a year ago
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"0.75 it is… however interesting notes..
Expect the next 8 quarters will be in recession…
Expecting interest rates to top out at 5.25%… with this rise we are now up to 3%
Inflation now expected to top out at 11% ……
A few things here….
1) the bank are kinda flying blind here.. since the autumn statement isn’t for 2 weeks
2) this would have been a lot….lot worse if trussonomics had been in place! If truss had still been in charge you may have been looking at a 2% rise!
Under truss… inflation was looking at topping out at 13.5% and interest rates at 6.25% "
I think we can safely say that Truss is a moron |
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By (user no longer on site)
over a year ago
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"0.75 it is… however interesting notes..
Expect the next 8 quarters will be in recession…
Expecting interest rates to top out at 5.25%… with this rise we are now up to 3%
Inflation now expected to top out at 11% ……
A few things here….
1) the bank are kinda flying blind here.. since the autumn statement isn’t for 2 weeks
2) this would have been a lot….lot worse if trussonomics had been in place! If truss had still been in charge you may have been looking at a 2% rise!
Under truss… inflation was looking at topping out at 13.5% and interest rates at 6.25%
I think we can safely say that Truss is a moron "
No that was Gordon... 
Truss was just plain bonkers. |
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By (user no longer on site)
over a year ago
|
"0.75 it is… however interesting notes..
Expect the next 8 quarters will be in recession…
Expecting interest rates to top out at 5.25%… with this rise we are now up to 3%
Inflation now expected to top out at 11% ……
A few things here….
1) the bank are kinda flying blind here.. since the autumn statement isn’t for 2 weeks
2) this would have been a lot….lot worse if trussonomics had been in place! If truss had still been in charge you may have been looking at a 2% rise!
Under truss… inflation was looking at topping out at 13.5% and interest rates at 6.25%
I think we can safely say that Truss is a moron
No that was Gordon...
Truss was just plain bonkers."
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Interest rates should be pegged slightly above inflation (say 1 or 2% above) to encourage saving.
Nobody should need to borrow for anything except buying a house.
Other than the house, if you can't afford it, don't buy it and save up. |
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By *eroy1000Man
over a year ago
milton keynes |
"0.75 it is… however interesting notes..
Expect the next 8 quarters will be in recession…
Expecting interest rates to top out at 5.25%… with this rise we are now up to 3%
Inflation now expected to top out at 11% ……
A few things here….
1) the bank are kinda flying blind here.. since the autumn statement isn’t for 2 weeks
2) this would have been a lot….lot worse if trussonomics had been in place! If truss had still been in charge you may have been looking at a 2% rise!
Under truss… inflation was looking at topping out at 13.5% and interest rates at 6.25% "
Inflation topping at 11% seems a bit optimistic given what's happening elsewhere but hope they are right. The energy price guarantee thing ends in April and is widely expected to be changed significantly. Unless gas prices continue to fall, won't this be a big increase to inflation on its own |
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By (user no longer on site)
over a year ago
|
"0.75 it is… however interesting notes..
Expect the next 8 quarters will be in recession…
Expecting interest rates to top out at 5.25%… with this rise we are now up to 3%
Inflation now expected to top out at 11% ……
A few things here….
1) the bank are kinda flying blind here.. since the autumn statement isn’t for 2 weeks
2) this would have been a lot….lot worse if trussonomics had been in place! If truss had still been in charge you may have been looking at a 2% rise!
Under truss… inflation was looking at topping out at 13.5% and interest rates at 6.25% "
It's good that you place such trust in the Bank of England. It's done a sterling job over the past two years. |
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By (user no longer on site)
over a year ago
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" I think we can safely say that Truss is a moron
No that was Gordon...
Do I see Jilted John in disguise?"
North of the border, we call him kilted Jock.. |
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Those with savings got hammered for 12 years while cheap money was made available at low interest to those who wanted to borrow
Sadly due to poor monetry policy fro. The bofe pushing about £2trn of cash into the economy. We are paying for it now
This comes via inflation from money printing which has to be taken back under control.
People won't curb their spending of their own volition. Behavioural economics has taught us this.
The itnerest rates are probably where they should have always been when practicing qe
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By *ackal1Couple
over a year ago
Manchester |
"Those with savings got hammered for 12 years while cheap money was made available at low interest to those who wanted to borrow
Sadly due to poor monetry policy fro. The bofe pushing about £2trn of cash into the economy. We are paying for it now
This comes via inflation from money printing which has to be taken back under control.
People won't curb their spending of their own volition. Behavioural economics has taught us this.
The itnerest rates are probably where they should have always been when practicing qe
"
Or perhaps less deregulation from repeated Chancellors since thatcher including Gordon Brown ( his own view ) which enabled further greed and risk taking with the bankers, which in turn lead to the financial crash in the first place.
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By (user no longer on site)
over a year ago
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"12 years. Yes, 12 years of the tories have led up to this."
explain how labour would have done any different. Your reliance on imports crosses political division does it not ?
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By *oo hotCouple
over a year ago
North West |
"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be? "
I personally think that raising interest rates to tackle inflation that is primarily being led by energy costs is ideological as opposed to being logical. The argument is that raising interest rates takes money out of circulation which in turn dampens inflation, but in this particular cocktail of circumstances, money is already being taken out of circulation with increased energy costs. Ideologically and one-dimensionally driving this fight against inflation risks putting the country into a long-term depression.
If the BoE and the Government truly wanted to get the economy under control they would work together to increase taxation as a means of taking money out of circulation and maintaining stable mortgage interest rates that could and should last a mortgage lifetime.
In my opinion, taxation is a far more ‘equal’ way of taking money out of circulation - but it could be used alongside interest rates to provide balance. |
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By (user no longer on site)
over a year ago
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"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be?
I personally think that raising interest rates to tackle inflation that is primarily being led by energy costs is ideological as opposed to being logical. The argument is that raising interest rates takes money out of circulation which in turn dampens inflation, but in this particular cocktail of circumstances, money is already being taken out of circulation with increased energy costs. Ideologically and one-dimensionally driving this fight against inflation risks putting the country into a long-term depression.
If the BoE and the Government truly wanted to get the economy under control they would work together to increase taxation as a means of taking money out of circulation and maintaining stable mortgage interest rates that could and should last a mortgage lifetime.
In my opinion, taxation is a far more ‘equal’ way of taking money out of circulation - but it could be used alongside interest rates to provide balance."
It is economics not ideology. If it were ideology it wouldn't be happening at the same time in the UK, EU, and the US, though in a way you are right that there isn't much difference policy wise between the governments of those different countries.
Increased gas prices don't take money out of circulation. You just spend money on gas rather than something else. Higher gas prices have been driving inflation.
Similarly taxation doesn't decrease money in circulation. The government spends it instead of you, and probably a lot less efficiently.
Interest rates are not particularly high now nor are they expected to be, historically speaking. |
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By *oo hotCouple
over a year ago
North West |
"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be?
I personally think that raising interest rates to tackle inflation that is primarily being led by energy costs is ideological as opposed to being logical. The argument is that raising interest rates takes money out of circulation which in turn dampens inflation, but in this particular cocktail of circumstances, money is already being taken out of circulation with increased energy costs. Ideologically and one-dimensionally driving this fight against inflation risks putting the country into a long-term depression.
If the BoE and the Government truly wanted to get the economy under control they would work together to increase taxation as a means of taking money out of circulation and maintaining stable mortgage interest rates that could and should last a mortgage lifetime.
In my opinion, taxation is a far more ‘equal’ way of taking money out of circulation - but it could be used alongside interest rates to provide balance.
It is economics not ideology. If it were ideology it wouldn't be happening at the same time in the UK, EU, and the US, though in a way you are right that there isn't much difference policy wise between the governments of those different countries.
Increased gas prices don't take money out of circulation. You just spend money on gas rather than something else. Higher gas prices have been driving inflation.
Similarly taxation doesn't decrease money in circulation. The government spends it instead of you, and probably a lot less efficiently.
Interest rates are not particularly high now nor are they expected to be, historically speaking. "
Increasing interest rates will not lower the price of gas.
Just because some large economies are doing the same thing doesn’t make it right. And also, as an aside - increasing interest rates in Germany do not immediately translate into higher personal mortgage rates. |
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By (user no longer on site)
over a year ago
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"The bank of england is expected to unveil the biggest interest rate hike for 33 years, as they are trying to control the rising food and energy costs to the households, what do you you think their plan will be?
I personally think that raising interest rates to tackle inflation that is primarily being led by energy costs is ideological as opposed to being logical. The argument is that raising interest rates takes money out of circulation which in turn dampens inflation, but in this particular cocktail of circumstances, money is already being taken out of circulation with increased energy costs. Ideologically and one-dimensionally driving this fight against inflation risks putting the country into a long-term depression.
If the BoE and the Government truly wanted to get the economy under control they would work together to increase taxation as a means of taking money out of circulation and maintaining stable mortgage interest rates that could and should last a mortgage lifetime.
In my opinion, taxation is a far more ‘equal’ way of taking money out of circulation - but it could be used alongside interest rates to provide balance.
It is economics not ideology. If it were ideology it wouldn't be happening at the same time in the UK, EU, and the US, though in a way you are right that there isn't much difference policy wise between the governments of those different countries.
Increased gas prices don't take money out of circulation. You just spend money on gas rather than something else. Higher gas prices have been driving inflation.
Similarly taxation doesn't decrease money in circulation. The government spends it instead of you, and probably a lot less efficiently.
Interest rates are not particularly high now nor are they expected to be, historically speaking.
Increasing interest rates will not lower the price of gas.
Just because some large economies are doing the same thing doesn’t make it right. And also, as an aside - increasing interest rates in Germany do not immediately translate into higher personal mortgage rates."
I didn't say it would lower the price of gas. But it will help to reduce inflation over time.
I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages.
The fundamental causes of inflation across the West have been lockdown policies and their after effects, government money printing to fund lockdowns, some effects of Ukraine, and failed energy policies. |
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"I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages. "
Why should the government assist the numptys who have overstretched themselves with unaffordable debt?
Interest rates had been 15% not long before I bought my first house, and I needed a 50% deposit.
People have been suckered into stupid amounts of debt for houses and other "essential" things. Cars on PCP is a great example of crass stupidity.
If you can't afford something, don't buy it. |
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By *irldnCouple
over a year ago
Brighton |
"I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages.
Why should the government assist the numptys who have overstretched themselves with unaffordable debt?
Interest rates had been 15% not long before I bought my first house, and I needed a 50% deposit.
People have been suckered into stupid amounts of debt for houses and other "essential" things. Cars on PCP is a great example of crass stupidity.
If you can't afford something, don't buy it."
I agree in principal but... when you bought your first home I bet the bank was only prepares to lend 3 x salary or 2.5 x joint salary! It was the norm in the 90s.
The issue is very different now as the multiples to salary have grown hugely since the 90s due to scale of house price increases.
15% rate on a small mortgage is far less concerning than 5-6% on a huge mortgage. |
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By (user no longer on site)
over a year ago
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"I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages.
Why should the government assist the numptys who have overstretched themselves with unaffordable debt?
Interest rates had been 15% not long before I bought my first house, and I needed a 50% deposit.
People have been suckered into stupid amounts of debt for houses and other "essential" things. Cars on PCP is a great example of crass stupidity.
If you can't afford something, don't buy it."
I agree with you totally. I wasn't really supporting the idea, merely commenting that in the current climate where the population expects the government to fix every problem and pay for everything, our weak politicians would find it hard not to intervene if people start losing their homes and the media is baying for action. |
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By (user no longer on site)
over a year ago
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"I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages.
Why should the government assist the numptys who have overstretched themselves with unaffordable debt?
Interest rates had been 15% not long before I bought my first house, and I needed a 50% deposit.
People have been suckered into stupid amounts of debt for houses and other "essential" things. Cars on PCP is a great example of crass stupidity.
If you can't afford something, don't buy it.
I agree in principal but... when you bought your first home I bet the bank was only prepares to lend 3 x salary or 2.5 x joint salary! It was the norm in the 90s.
The issue is very different now as the multiples to salary have grown hugely since the 90s due to scale of house price increases.
15% rate on a small mortgage is far less concerning than 5-6% on a huge mortgage."
The mortgage papers would have warned people that interest rates could go up. If they chose to ignore it or not to understand it, that's on them (or should be, though with politicians happy to pay people's salaries and gas bills for years I somehow doubt whether that's where we will end up). |
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By *irldnCouple
over a year ago
Brighton |
"I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages.
Why should the government assist the numptys who have overstretched themselves with unaffordable debt?
Interest rates had been 15% not long before I bought my first house, and I needed a 50% deposit.
People have been suckered into stupid amounts of debt for houses and other "essential" things. Cars on PCP is a great example of crass stupidity.
If you can't afford something, don't buy it.
I agree in principal but... when you bought your first home I bet the bank was only prepares to lend 3 x salary or 2.5 x joint salary! It was the norm in the 90s.
The issue is very different now as the multiples to salary have grown hugely since the 90s due to scale of house price increases.
15% rate on a small mortgage is far less concerning than 5-6% on a huge mortgage.
The mortgage papers would have warned people that interest rates could go up. If they chose to ignore it or not to understand it, that's on them (or should be, though with politicians happy to pay people's salaries and gas bills for years I somehow doubt whether that's where we will end up)."
Yep of course. My point is that you often see people talking about how interest rates have been far higher in the past but that was at a time when house prices were much lower, especially in relation to salaries. In other words, 5% now is probably a bigger deal than 15% in the 90s (not done the actual maths here). |
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"I'm sure if people start having their homes repossessed there will be increasing pressure for the government to step in and pay their mortgages.
Why should the government assist the numptys who have overstretched themselves with unaffordable debt?
Interest rates had been 15% not long before I bought my first house, and I needed a 50% deposit.
People have been suckered into stupid amounts of debt for houses and other "essential" things. Cars on PCP is a great example of crass stupidity.
If you can't afford something, don't buy it.
I agree in principal but... when you bought your first home I bet the bank was only prepares to lend 3 x salary or 2.5 x joint salary! It was the norm in the 90s.
The issue is very different now as the multiples to salary have grown hugely since the 90s due to scale of house price increases.
15% rate on a small mortgage is far less concerning than 5-6% on a huge mortgage.
The mortgage papers would have warned people that interest rates could go up. If they chose to ignore it or not to understand it, that's on them (or should be, though with politicians happy to pay people's salaries and gas bills for years I somehow doubt whether that's where we will end up).
Yep of course. My point is that you often see people talking about how interest rates have been far higher in the past but that was at a time when house prices were much lower, especially in relation to salaries. In other words, 5% now is probably a bigger deal than 15% in the 90s (not done the actual maths here)."
You are correct, I think 3x salary was the norm. Although it was in around 1990, so I can't quite remember. Also, I was a student so it was more difficult to convince the bank at the time
However, if lending policy had been kept at that, house building targets had been met, and people got married and stayed together (as was the norm) we wouldn't be in the situation where houses are so ridiculously expensive in this country.
My point stands though. People have borrowed too much because they were offered the money. This drives house price inflation. |
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By *hagTonight OP Man
over a year ago
From the land of haribos. |
"12 years. Yes, 12 years of the tories have led up to this. explain how labour would have done any different. Your reliance on imports crosses political division does it not ? "
It probably would of been alot better, one thing that is for sure, is that we wouldnt have had brexit, that is a tory thing.
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