Interest Rates to rise this week?

Big Jeff

Winger
There is the possibility that interest rates may rise this week.

The first in a series of rate rises could come as early as this week, with the Bank's rate-setting Monetary Policy Committee (MPC) due to pronounce on Thursday.

Good news for savers not so good for them on Standard variable rates or trackers.

Markets now expect the UK's main interest rate to rise from 0.1% to 0.25% in the first instance, with further increases to follow, perhaps reaching the pre-Covid level of 0.75% by the middle of 2022.
 


There is the possibility that interest rates may rise this week.

The first in a series of rate rises could come as early as this week, with the Bank's rate-setting Monetary Policy Committee (MPC) due to pronounce on Thursday.

Good news for savers not so good for them on Standard variable rates or trackers.

Markets now expect the UK's main interest rate to rise from 0.1% to 0.25% in the first instance, with further increases to follow, perhaps reaching the pre-Covid level of 0.75% by the middle of 2022.
Magic. Just in time for my fixed rate to end. What I never understand is why when they are trying to essentially control how expensive things are becoming they make most peoples biggest bill more expensive.
 
Magic. Just in time for my fixed rate to end. What I never understand is why when they are trying to essentially control how expensive things are becoming they make it more expensive.
Higher rates encourage you to save rather than spend your excess cash, therefore controlling inflation of consumer prices

it doesn’t work for mortgages obviously, but if your mortgage cost goes up you have less money to spend on other stuff, again controlling inflation.
 
Magic. Just in time for my fixed rate to end. What I never understand is why when they are trying to essentially control how expensive things are becoming they make most peoples biggest bill more expensive.
Similar to us.

Our fixed rate finished last month and we worked out we could pay off what we owe by March 1st 2022 if we let it go onto the variable rate and overpay by just over double the standard repayment amount.

Hopefully it won't be too much of a rise as the principal is so low - a few extra quid for the next four months should be neither nowt nor summat.
 
Similar to us.

Our fixed rate finished last month and we worked out we could pay off what we owe by March 1st 2022 if we let it go onto the variable rate and overpay by just over double the standard repayment amount.

Hopefully it won't be too much of a rise as the principal is so low - a few extra quid for the next four months should be neither nowt nor summat.
Unfortunately I've got another 12 years to go 😀
 
Higher rates encourage you to save rather than spend your excess cash, therefore controlling inflation of consumer prices

it doesn’t work for mortgages obviously, but if your mortgage cost goes up you have less money to spend on other stuff, again controlling inflation.
Then all that happens is all we hear is the economy is struggling. Putting peoples mortgages up isn't going to bring the price of gas, petrol and food down which is what is fuelling inflation at the minute. All it does is put people who are already struggling further in the shit.
 
True current rate of inflation (RPI) was 4.9% in September. Best fixed rate savings rate currently 0.9%

Therefore in real terms, savers losing 4% per annum.

If you had £100,000 savings, you would be losing £4,000 this year.....:eek::evil:

(and of course, that is even before tax is deducted)
 
Raising rates now will be the stupidest thing since thinking headbutting a spike is a good idea.

Australia didn't do it. The mpc would be moronic to follow through when the economy is struggling. They didn't care about inflation over or under shoot before and now they do?

My book is positioned for no hike.
Hope your right.
 
True current rate of inflation (RPI) was 4.9% in September. Best fixed rate savings rate currently 0.9%

Therefore in real terms, savers losing 4% per annum.

If you had £100,000 savings, you would be losing £4,000 this year.....:eek::evil:

(and of course, that is even before tax is deducted)

Best 1 Yr fix is 1.35%, and 2% for 5 Yr

There's a way of getting 5% instant access, but involves a lot of faff on for any noticeable benefit.
 
True current rate of inflation (RPI) was 4.9% in September. Best fixed rate savings rate currently 0.9%

Therefore in real terms, savers losing 4% per annum.

If you had £100,000 savings, you would be losing £4,000 this year.....:eek::evil:

(and of course, that is even before tax is deducted)
Invest don’t save, the old adage of save for a rainy day is so out dated.
On interest rates the government will fight tooth and nail to keep them as low as possible given the amount of borrowing thy have done over the past 18months, I wouldn’t worry too much about a return to the old days of high interest rates
 
True current rate of inflation (RPI) was 4.9% in September. Best fixed rate savings rate currently 0.9%

Therefore in real terms, savers losing 4% per annum.

If you had £100,000 savings, you would be losing £4,000 this year.....:eek::evil:

(and of course, that is even before tax is deducted)
Meanwhile in that time - September 2020 to September 2021 - your typical investor who invests in a portfolio primarily of global equities would have returned around 15 to 20%. And given the COVID losses from March would have been pretty much made back by then (again looking globally; the UK has still not recovered) that’s a fantastic inflation busting return in exchange for taking a little bit of risk.
 
The economy is in a very precarious situation at the minute.

It's not just a case of upping the interest levels to try and curb inflation.

This this time the inflation is essentials, food, gas, electricity, council tax, petrol. All taking large proportion out of the working persons disposable income.

An increase in mortgage could be the straw that breaks the camel's back. It might trigger a huge recession.

I think any increase will be very small. I would be cautious about rising interest rates in this scenario, when it might be a short term blip of inflation due to a global perfect storm of shit.

Big decision for the bank of England.
 
The economy is in a very precarious situation at the minute.

It's not just a case of upping the interest levels to try and curb inflation.

This this time the inflation is essentials, food, gas, electricity, council tax, petrol. All taking large proportion out of the working persons disposable income.

An increase in mortgage could be the straw that breaks the camel's back. It might trigger a huge recession.

I think any increase will be very small. I would be cautious about rising interest rates in this scenario, when it might be a short term blip of inflation due to a global perfect storm of shit.

Big decision for the bank of England.
It's huge. They will be making a massive mistake to raise. If they do they'll be cutting soon enough
 

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