National News Interest rates

Peterdev

Peterdev

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With inflation soaring at unprecedented levels, the government I think has lost the plot.
Interest rates should have been increased but instead of which the government famously known for dithering has done nothing.
I am sure they are worried about the opposition and those with mortgages.
With rates at 0.1% I feel there should be a gradual return to the 4% or 5% level. This would of course benefit savers who’ve had a torrid time for several years. Mortgages are still at their cheapest ever but a long way off historic rates of 15% back in the early eighties.
A responsible government can and should’ve increased rates at the meeting a couple of weeks ago. As usual it will be too little and too late.
If inflation hits higher levels soon, a knee jerk reaction will cause even more grief.
 
Except it isn`t the Government's responsibility it's the BoE Monetary Policy Committee who have already indicated they will rise.

In the new world the news gets dropped, they gauge the reaction and then do the deed. They`ll rise early December and then probably a few more times in the first quarter of 2022.
 
The interest rate rises are being driven by the cost of fuel and gas from what I've read, raising interest rates won't change that. People just won't start heating their home less.

As EY says, it's a BOE decision in the end of course.
 
I agree it’s a BOE decision and has been for many years.
Its failure to act is a poor decision and will harm the economy due to its inaction.
A policy of gradually increasing interest rates to around 4% over 12 months would be a responsible decision in the light of inflation accelerating as it is now. NZ and Australia have already increased their rates and I’m sure USA are looking at doing the same.
 
Peterdev said:
I agree it’s a BOE decision and has been for many years.
Its failure to act is a poor decision and will harm the economy due to its inaction.
A policy of gradually increasing interest rates to around 4% over 12 months would be a responsible decision in the light of inflation accelerating as it is now. NZ and Australia have already increased their rates and I’m sure USA are looking at doing the same.
Click to expand...
Hi Peter, I am aware NZ raised their's recently, but dont believe Australia has.

In a lot of countries, I dont think you will see significant movement in the next 12 months.
 
I will add inflation is affecting countries here in Asia due to supply issues including talent. For example, both here and in Singapore with restrictions on entering the country plus the direction to employ local talent has pushed salaries up by 30-40% in some industries.
 
Peterdev said:
With inflation soaring at unprecedented levels, the government I think has lost the plot.
Interest rates should have been increased but instead of which the government famously known for dithering has done nothing.
Click to expand...
I am not a fan if this government but it is not their decision . So dithering and lost the plot?
 
MalaysiaYellow said:
I will add inflation is affecting countries here in Asia due to supply issues including talent. For example, both here and in Singapore with restrictions on entering the country plus the direction to employ local talent has pushed salaries up by 30-40% in some industries.
Click to expand...

Don`t be silly that is purely caused by BREXIT (has to be in shouty caps).

It`s not a global problem in the same way the supply of raw materials is also driving up prices it's all BREXIT.

Paging @Sheik djibouti

:ROFLMAO: :ROFLMAO:
 
Peterdev said:
I agree it’s a BOE decision and has been for many years.
Its failure to act is a poor decision and will harm the economy due to its inaction.
A policy of gradually increasing interest rates to around 4% over 12 months would be a responsible decision in the light of inflation accelerating as it is now. NZ and Australia have already increased their rates and I’m sure USA are looking at doing the same.
Click to expand...
Mmm. Up to 4% over 12 months?
Personally I would see that as reckless. The number of people with mortgages and businesses who could go under with 4% Interest rates could cause the economy much damage.
I suspect also that the BoE believes that the inflationary pressures are temporary and so don't have to over react.
 
Peterdev said:
With inflation soaring at unprecedented levels, the government I think has lost the plot.
Interest rates should have been increased but instead of which the government famously known for dithering has done nothing.
I am sure they are worried about the opposition and those with mortgages.
With rates at 0.1% I feel there should be a gradual return to the 4% or 5% level. This would of course benefit savers who’ve had a torrid time for several years. Mortgages are still at their cheapest ever but a long way off historic rates of 15% back in the early eighties.
A responsible government can and should’ve increased rates at the meeting a couple of weeks ago. As usual it will be too little and too late.
If inflation hits higher levels soon, a knee jerk reaction will cause even more grief.
Click to expand...
House prices are a lot higher now in relation to wages than they were in the 80s. Interest rate rises would be disastrous for people who’d recently taken out massive mortgages - which are the only kind available if you want to buy in the south.
 
Essexyellows said:
Don`t be silly that is purely caused by BREXIT (has to be in shouty caps).

It`s not a global problem in the same way the supply of raw materials is also driving up prices it's all BREXIT.

Paging @Sheik djibouti

:ROFLMAO: :ROFLMAO:
Click to expand...
Paging????

Get with the programme, Grandad. What next....faxes?

As you well know, Brexit has made the problem worse for us, it has exacerbated the global issue. Nobody wins, just we lose worse than everyone else 🤷‍♂️

You really are asking Ryan to get his explainers out again, aren't you?

Staggering you still find it this difficult to understand 🤷‍♂️
 
werthersoriginal said:
House prices are a lot higher now in relation to wages than they were in the 80s. Interest rate rises would be disastrous for people who’d recently taken out massive mortgages - which are the only kind available if you want to buy in the south.
Click to expand...
Agreed - my parents' mortgage was 'at its peak' £27,000. Mine 'at its peak' was £408,000 which I'm very pleased to say is mainly now a distant but stressful at the time memory. I only took out that level of mortgage due to having a very secure employment, others will not be so fortunate.

Others will be in the situation that I was and a rise to 4% would cause a lot of repossessions and businesses to fail.
 
werthersoriginal said:
House prices are a lot higher now in relation to wages than they were in the 80s. Interest rate rises would be disastrous for people who’d recently taken out massive mortgages - which are the only kind available if you want to buy in the south.
Click to expand...

Yeah, but the people who have managed to save money already will be better off.

Won't somebody think of those who aren't close to the breadline?!
 
There is still a lot of uncertainty, so I wouldnt expect things to change much in the next 12-18 months.

Oxford homeowners, I am not sure if you seeing the same. My late father, his house in Oxford 2 years ago (pre Covid) was valued at 420,000. It has just sold for 500,000 and been bought by someone who work and lived in London. They still work in London, but now with hybrid working, have moved to live in Oxford.

For my company, we are moving a sizeable amount of roles our of London to Birmingham, Leeds and Edinburgh, in addition to offering some permanent WFH.
 
MalaysiaYellow said:
There is still a lot of uncertainty, so I wouldnt expect things to change much in the next 12-18 months.

Oxford homeowners, I am not sure if you seeing the same. My late father, his house in Oxford 2 years ago (pre Covid) was valued at 420,000. It has just sold for 500,000 and been bought by someone who work and lived in London. They still work in London, but now with hybrid working, have moved to live in Oxford.

For my company, we are moving a sizeable amount of roles our of London to Birmingham, Leeds and Edinburgh, in addition to offering some permanent WFH.
Click to expand...
People moving out of urban areas post-covid and inflating house prices is a problem for many area, and a real problem for some popular areas. Places like Cornwall and the Lake District have seen massive price hikes as a result of this, as people realise they don't need to be physically located close to traditional business/commerce centres. In one respect it is great that people can work more flexibly and potentially have a better work/life balance. On the other hand it is pretty disasterous for the local population who are even more priced out of the market than before.
 
MalaysiaYellow said:
There is still a lot of uncertainty, so I wouldnt expect things to change much in the next 12-18 months.

Oxford homeowners, I am not sure if you seeing the same. My late father, his house in Oxford 2 years ago (pre Covid) was valued at 420,000. It has just sold for 500,000 and been bought by someone who work and lived in London. They still work in London, but now with hybrid working, have moved to live in Oxford.

For my company, we are moving a sizeable amount of roles our of London to Birmingham, Leeds and Edinburgh, in addition to offering some permanent WFH.
Click to expand...

The UK Government might well call that "levelling up", things have changed a lot and some things will never go back to what they were.

Mrs EY(Mk2) was at a UK wide conference on Tuesday - all done remotely/WFH with break out groups etc. She finds it far easier to focus on the job in hand without distractions such as where to get food, go to the loo etc.
Then you have the immense reduction in costs - no travel, no overnight hotels, no expensive building or rooms - and a better end result.
 
Sheik djibouti said:
People moving out of urban areas post-covid and inflating house prices is a problem for many area, and a real problem for some popular areas. Places like Cornwall and the Lake District have seen massive price hikes as a result of this, as people realise they don't need to be physically located close to traditional business/commerce centres. In one respect it is great that people can work more flexibly and potentially have a better work/life balance. On the other hand it is pretty disasterous for the local population who are even more priced out of the market than before.
Click to expand...

Levelling up. :) :ROFLMAO: 🤷‍♀️
 
Essexyellows said:
Levelling up. :) :ROFLMAO: 🤷‍♀️
Click to expand...
I'm not sure pricing out the local community really qualifies as levelling up.

That is an extremely perverse definition if that's what the Tories mean

And I wouldn't actually put it past them. Almost the antithesis of the original Levellers, which knowing Boris, was his aim all along :ROFLMAO:
 
MalaysiaYellow said:
Hi Peter, I am aware NZ raised their's recently, but dont believe Australia has.

In a lot of countries, I dont think you will see significant movement in the next 12 months.
Click to expand...
To be honest I knew NZ had and I heard Australia were about to go the same way.
I hope there’s not significant movement over the next 12 months. It depends on how other countries respond. I wouldn’t be surprised if USA start to move upwards soon. The problem is once they start moving up, if inflation doesn’t start to fall back, interest rates may be pushed up more
 
Sheik djibouti said:
I'm not sure pricing out the local community really qualifies as levelling up.

That is an extremely perverse definition if that's what the Tories mean

And I wouldn't actually put it past them. Almost the antithesis of the original Levellers, which knowing Boris, was his aim all along :ROFLMAO:
Click to expand...

It's the reality of what happens as "the money" moves around.

Oxford is a prime example of it, same happened in Essex and, in a few years time, it will reach Leicester and further North.

As long as you move ahead of the ripple it can be beneficial. :)
 
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