Interest Rates to rise this week?



monkeytassle said:
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.
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What makes you think the economy is struggling? The economy is extremely buoyant at the moment as demonstrated by the significant rise in prices.

Rates need to move up to control inflation. Better to rise gently now rather than quickly later on.
 
Big Jeff said:
Mortgage rates will rise immediately but rates for savers will not. Same as changing prices of crude oil.
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Marcus put theirs up by 0.1% a few weeks ago. Have noticed fixed rates creeping up a bit over last few weeks anarl

If they do go up, it's only going to be by 0.15% to 0.25% anyway.
 
chunkylover53 said:
Higher rates encourage you to save rather than spend your excess cash, therefore controlling inflation of consumer prices
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Normally that is correct

The problem is that we have had a series of shocks... credit crunch, Brexit, Covid which have meant that people saved more even when interest rates were low.

Classic Keynesian liquidity trap

It will be interesting to see if a period of higher Government spending helps gets things back to normal
 
Northern_chappy said:
What makes you think the economy is struggling? The economy is extremely buoyant at the moment as demonstrated by the significant rise in prices.

Rates need to move up to control inflation. Better to rise gently now rather than quickly later on.
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Rising prices do not necessarily reflect a booming economy. It is a strange set of circumstances which have led to current inflation levels such as supply shortages due to Covid and Brexit, gas and electricity prices, petrol/diesel prices which increase the transport costs of all goods as well as the price itself and Eat Out to Help Out in 2020 reducing restaurant prices compared to 2021.

The MPC raising interest rates too quickly risks choking off an post Covid economic recovery.
 
Northern_chappy said:
What makes you think the economy is struggling? The economy is extremely buoyant at the moment as demonstrated by the significant rise in prices.

Rates need to move up to control inflation. Better to rise gently now rather than quickly later on.
Click to expand...
From the boe itself:

Bank staff have revised down their expectations for the level of UK GDP in 2021 Q3 by around 1% since the August Report, leaving the expected level of Q3 GDP around 2½% below its pre-Covid level.

These price rises are an unwind of the excess amount of liquidity built up during covid. As sure as I have a hole in my arse taxes will go up. The UK is one giant floating rate note. Any increase in rates severely impacts
 
I have been extremely lucky through the life of my mortgage so far, 10yrs left but i was able to get a tracker rate 15yrs ago at 0.25% above base rate. Would have to rise significantly for me to consider a fixed rate yet. Never ever seen a deal as good since then (not that i have been looking extensively). Been keeping an eye in interest rates for years waiting for that time when it looks like huge rises may start but has always gone down or remained the same.
 

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