Ebor
Well-known member
I was purely GeographyGood point, I was more English than Maths at school Probs 70% English, 40% Maths
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I was purely GeographyGood point, I was more English than Maths at school Probs 70% English, 40% Maths
Thanks![]()
The lack of an economic forecast by OBR is because truss has an authoritarian style of government and these types (like putin) really don’t want or think mirrors should be held up against them.Tomorrow
UK households face £3bn hit if Bank goes ahead with 0.75-points rate rise | Bank of England | The Guardian
Hike in interest rates would be the biggest in 33 years and would heap renewed pressure on borrowersamp.theguardian.com
They also have set out that they want interest rates above 3% by the end of the year.
Now I know this debate rages all the time that hiking interest rates is the only way to fight inflation, but what happens when we hit the inevitable recession as basic economics tells you the best way to tackle a recession is to cut interest rates???
You’ve got to love Stagflation and it’s timing, no wonder the tories decided to hold off with their economic forecast![]()
Agree you have to make that decision yourself. Is it more important to pay the charge in the hope that your protecting yourself or is more important to have the cash in your savings and have the cost monthly if rates go upYeah but might be worth paying to fix![]()
Increase in rates on savings accounts will be minimal compared to the impact on those with 95%+ mortgages.Swings and roundabouts,.good news for savers....
Yes but when people took out their mortgages 10 years ago they rarely Budget for rates on the rise when there was no sign of rates going up. History tells you people make short term financial decisions when they bulk up on their mortgage. Housing recession on its way May be good for affordability of housing but defaults will rise exponentially. Hard times coming.When we got our 1st mortgage rates were at 14.5%, things are a long long way away from those sorts of charges
You’d have to say that inflation effect will take 12 months as gas and electricity in 97% up on 12 months agoIt will be interesting to see how the 2 year price cap effects inflation. If, as Truss states, it knocks 5% off then the interest rate increases might slow but with all these tax cuts I can't really see inflation dropping to such an extent.
The BoE are under great pressure to act. The only mechanism they have is increasing interest rates. Bad times.
Yes but when people took out their mortgages 10 years ago they rarely Budget for rates on the rise when there was no sign of rates going up. History tells you people make short term financial decisions when they bulk up on their mortgage. Housing recession on its way May be good for affordability of housing but defaults will rise exponentially. Hard times coming.
Bad times for sure but imagine your mortgage was a lot smaller and a much lower income multiple than people have had to take in modern times due to house price inflation?When we got our 1st mortgage rates were at 14.5%, things are a long long way away from those sorts of charges
Then who will look after my beloved flock?
I really feel for the people who’ve borrowed that much to just get on the ladder in a cheap starter home. However if they’ve had to stretch themselves so much just to get on the ladder I suspect they’ll have been steered towards longer term fixes. Hopefully that’s the case for the majority in that position.Increase in rates on savings accounts will be minimal compared to the impact on those with 95%+ mortgages.
The Bank of England or using historic methods for a historical event that hasn’t happened. This isn’t a demand issue. If fuel and supply issues are increasing things, increasing interest rates won’t resolve.The Bank of England have literally one tool at their disposal and that is the control of interest rates.
So, in theory, raising the rate of inflation will stem consumer spending and prices will fall as a consequence.
That's the theory, but inflation is being driven by supply chain issues, worker shortages and the war in Ukraine.
I'm not an expert, not by any measure, but surely if a record number of people are living in poverty - and those figures rising daily - this BofE move will only compound the problem?
I can only conclude that the first world is now a slave to unregulated, open market capitalism.
It's a dystopian financial nightmare.
I agree, that's my point, it won't effect inflation one bit, just push more people into deeper poverty.The Bank of England or using historic methods for a historical event that hasn’t happened. This isn’t a demand issue. If fuel and supply issues are increasing things, increasing interest rates won’t resolve.
I’d say the last 15 would be more accurate.Increasing rates will crash the housing market. A lot of people have took mortgages out beyond their means over the last 5 years. Once fixed terms lapse they will find themselves in difficulty. I would suspect we are 3 years away from a major crash in the housing market.
Trouble with a long fix is you have no opportunity to get some paid off / benefit from increase in value and hit 90% or 85% ltv bands which would then reduce their monthly costs. We lost 20k on our old house so we had to stretch ourselves a bit, taking a 2 year fix initially meant that by the time we remortgaged onto a 5 year, we were at 85% LTV and our payments dropped a lot and that now goes into extra overpayments as we do about £600 a month overI really feel for the people who’ve borrowed that much to just get on the ladder in a cheap starter home. However if they’ve had to stretch themselves so much just to get on the ladder I suspect they’ll have been steered towards longer term fixes. Hopefully that’s the case for the majority in that position.
However there are a hell of lot of people with LTVs like that who simply didn’t need to borrow so much.
Rates have been at an all time low for years. They were only going to go one way. It was always a case when not if. The why was largely irrelevant from a financial standpoint.
Most mortgage illustrations now give an example of what an interest rate change will do to your monthly payment in pounds and pence.
If people chose to ignore that, or gamble on not fixing in a rate that they knew they could afford then more fool them.
When we got our 1st mortgage rates were at 14.5%, things are a long long way away from those sorts of charges