Interest rates down

[Kickstart]

Hi

Interest rates have gone down by 1.5% points to 3%. That is one hell of a drop.

And personally not certain it is a good thing. Might help in the short term but lousy in the long term unless something can be done to control those things whose price is mainly dependent on interest paid rather than the actual price (eg, houses). At best it is papering over the cracks.

All the best

Keith
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[Wafer_Thin_Ham]

Aye, saw that earlier, it is one hell of a drop, although I've seen that some economists have been predicting 0% base rate next year.
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[Nufkamp]

And how much of this 1.5% will filter through to mortgage payers I wonder? 1/2% if we're lucky.
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[Itchy]

Its a (feeble) attempt to stop deflation...

Everyone is becoming more and more fearful. So everyone stops spending and starts saving/paying down debts. But because consumer spending is 70% of the UK economy, when people stop spending the economy dives further and further*. So people become even more fearful, and therefore spend even less and save even more.


*less spending means job cuts, which means less tax receipts , which means higher taxes.

Beats hyperinflation though , but then again I benefit from deflation more than I do hyperinflation.

Though biflation may occur, ie inflation in vital commodities yet deflation in things that need leverage to sell , ie cars / bikes etc..

In effect the government has just given a heroin addict some more heroin and told them you can come off any time you like... sort of..
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[Robby]

Does this mean house prices will come down a bit more?

I'd like them to. My buy price is £90k, £100k at a push. Currently 1 bed flats anywhere near London are at around £110-120k.

[WildGoose]

Can banks be forced to pass this on, or is it all up to them?

Yes Gordon has suggested they pass it on, but sounds to me like they do what the hell they like. Get bailed out, from our pockets, then continue to shaft us with the mortgage repayments.

Pretty fucking sick of all the excuses, look how quick prices get chucked up out of proportion. Then when they are due to fall again, you get some crap about "oooh *sucks teeth* it doesn't work like that".

Was rather excited, as my fixed rate is up soon, a low base rate should mean an ability for us to secure another fixed, at a rate equivalent to current or below. A move to the variable rate (currently approx 2.5% above our fixed) would really hurt. Nevermind the fact that I doubt I would ever sleep if I was on a variable rate.
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So in other words, he stopped you for being flagrantly in posession of a motorcycle in direct contravention of the Hippies, Darkies and People Whose Face I Don't Like The Look of (Police Powers) Act. 1976

[owdamer]

[Kickstart]

[Itchy]

[Robby]

So if I take the middle line between Itchy and Keith, I should wait a year or two and have a tinfoil hat on standby.

Oh and hold onto my nice, safe government job.

[Kickstart]

[Kickstart]