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[Finance] Base rate increase.









Deleted member 37369

Well-known member
Aug 21, 2018
1,994
Screenshot 2023-02-02 at 12.22.20.png
 




ropey9

Active member
Feb 25, 2009
181
I really fail to understand how this curbs the current inflation problem. Inflation is not being driven by things that an interest rate rise will impact. It will stop spending certainly because this just makes a terrible situation for people that are already struggling far worse.
 




mejonaNO12 aka riskit

Well-known member
Dec 4, 2003
21,545
England
"I don't know why people with tracker mortgages moan about the interest rates. When I bought my house the interest rates were...."

Yeah, but your house was worth £16.78 and a bag of scampi fries.
 


Weststander

Well-known member
NSC Patron
Aug 25, 2011
64,852
Withdean area
According to both the BBC and Sky News experts/interviewees, they all predict that, then graduated falls.

Whilst the US Fed are going further with increases after that.

Out of 27.8m UK households, this will affect:
  • 2.9m households with a variable rate mortgage; and
  • 1.8m households with fixed rate mortgages, deals ending in 2023.
Average UK mortgage debt is £126,000.
 


dazzer6666

Well-known member
NSC Patron
Mar 27, 2013
52,957
Burgess Hill
I really fail to understand how this curbs the current inflation problem. Inflation is not being driven by things that an interest rate rise will impact. It will stop spending certainly because this just makes a terrible situation for people that are already struggling far worse.
It’s not quite that simple though….way less than half of households have mortgages…..and those that have savings will have more to spend. Agree it’s another horrible kick in the nuts for those struggling though.
 




Westdene Seagull

aka Cap'n Carl Firecrotch
NSC Patron
Oct 27, 2003
21,185
The arse end of Hangleton
I really fail to understand how this curbs the current inflation problem. Inflation is not being driven by things that an interest rate rise will impact. It will stop spending certainly because this just makes a terrible situation for people that are already struggling far worse.
THIS .... with bells on. Unless the BoE really think hiking interest rates up will lower energy costs which are one of the main inflationary things :facepalm:
 


pb21

Well-known member
Apr 23, 2010
6,373
Whilst the US Fed are going further with increases after that.
The Fed raised their rate by 0.25% yesterday and after Powell gave a conference indicating that they may not have to go much further...
 






Weststander

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NSC Patron
Aug 25, 2011
64,852
Withdean area
THIS .... with bells on. Unless the BoE really think hiking interest rates up will lower energy costs which are one of the main inflationary things :facepalm:
I always said the same. Then the BoE explained that these hikes are to prevent secondary inflation.
https://www.bankofengland.co.uk/explainers/why-are-interest-rates-in-the-uk-going-up

The argument that they dampen a spiral of high wage increases (in effect private sector) and resulting price rises. Short term pain to prevent enduring high inflation that would destroy the capital value of savings in real terms, and exacerbate the wages/price hikes pressure.
 
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Weststander

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Aug 25, 2011
64,852
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Tom Hark Preston Park

Will Post For Cash
Jul 6, 2003
70,648
THIS .... with bells on. Unless the BoE really think hiking interest rates up will lower energy costs which are one of the main inflationary things :facepalm:
What a lovely day to report

Oil giant Shell posts highest-ever annual profit of $40 billion​

This while millions of people have to think very seriously about the choice between heating or eating. It truly is shameful
 




mejonaNO12 aka riskit

Well-known member
Dec 4, 2003
21,545
England
And fixed rate mortgage deals continue to fall from the October peak. See if that more positive news gets reported.
Isn't that like being really happy to tell everyone you only have 17 broken bones left to heal after your car crash in October which left you with 45 newly broken bones?
 


Weststander

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Aug 25, 2011
64,852
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ropey9

Active member
Feb 25, 2009
181
I always said the same. Then the BoE explained that these hikes are to prevent secondary inflation.
https://www.bankofengland.co.uk/explainers/why-are-interest-rates-in-the-uk-going-up

The argument that they dampen a spiral of high (in effect private sector) and resulting price rises. Short term pain to prevent enduring high inflation that would destroy the capital value of savings in real terms, and exacerbate the wages/price hikes pressure.
Its not really helping much then, the whole country is on strike due to the cost of existing (yes this is simplistic), can't see this making this better.

It will be interesting to see the mortgage default rate / repossessions. Maybe it will help with house prices as the poor buggers that lose their houses will increase the supply. Probably not as the wealthy will just snap up the repossession and rent them back to the same people.
 


pb21

Well-known member
Apr 23, 2010
6,373




southstandandy

WEST STAND ANDY
Jul 9, 2003
5,724
It's amazing how 4% now seems high. Sadly I'm old enough to have had mortgage in the 80's when I had a 5 year deal at 8% and inflation was poor then too. How times change.
 


Weststander

Well-known member
NSC Patron
Aug 25, 2011
64,852
Withdean area
Its not really helping much then, the whole country is on strike due to the cost of existing (yes this is simplistic), can't see this making this better.

It will be interesting to see the mortgage default rate / repossessions. Maybe it will help with house prices as the poor buggers that lose their houses will increase the supply. Probably not as the wealthy will just snap up the repossession and rent them back to the same people.
That really happened in the early/mid 90's in huge numbers. You might recall?
 


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