How much will BoE cut rates by today?

[BrilloPad]

How much will BoE cut rates by today?

poll to follow - be patient.....

[Purple Dalek]

1.5%, they really should take decisive action.

[SantaClaus]

The forecast consensus is a cut by 1%

Anything less and the pound will rally.

It will probably even rally at 1%. A case of sell the rumour (of the cut) and buy the news. But I expect the long term downtrend to continue eventually.

[FiveTimes]

I'm going for a 1.25% cut

[weegordy]

well its definately going to be within the 1%-1.5% bracket... either of which well be warmly welcomed.... thats if, of course, the banks then pass this on!!

im lucky enough to have tied up a very good tracker mortgage at the start of the year (base rate +0.24).... which means that my interest will be under half of what it was.

however, in the main, mortgage companies arent passing the cut in rate on to current lenders and new potential lenders. Their fixed rates are still high and the variable rates even higher!

Also- with the rate being slashed by so much, you would think that this would then impact other borrowing products like overdrafts and credit cards (things that many people use on a day to day basis).... but to date- again in the main- this hasnt been done.

I would then say that although the idea behind the cut in base rate was to help home owners and borrowers.... if the banks arent passing them on, then its not really helping at all.

so if the rate is cut again- what should the government do in terms of forsing the banks hands in passing this on? can they do anything??

[swamp]

Originally Posted by weegordy

so if the rate is cut again- what should the government do in terms of forsing the banks hands in passing this on? can they do anything??

I don't see why the banks should be forced to pass the rate cut to their customers. If you have a tracker the bank will pass on the cut (unless your mortgage is collared). If you're on SVR I'm not sure the bank is obliged to pass on rate cuts.

[Bear]

Originally Posted by weegordy

...
so if the rate is cut again- what should the government do in terms of forsing the banks hands in passing this on? can they do anything??

Originally Posted by swamp

I don't see why the banks should be forced to pass the rate cut to their customers. If you have a tracker the bank will pass on the cut (unless your mortgage is collared). If you're on SVR I'm not sure the bank is obliged to pass on rate cuts.

They're not obliged to change their SVR (although Lloyds did promise a couple of years ago that their SVR would never be more than 2% above BoE base).

Trackers should change accordingly and there is an article in the paper today talking about the FSA looking at these 'collars'. If the collar wasn't specifically mentioned in the KFI document presented to the customer prior to taking the mortgage then they would be in breach of regulations and therefore it wouldn't be enforceable.

Halifax specifically took any reference to the collar out of their KFIs a couple of years ago after the FSA said the document was getting too long and complicated!!

[Ravello]

Originally Posted by swamp

I don't see why the banks should be forced to pass the rate cut to their customers. If you have a tracker the bank will pass on the cut (unless your mortgage is collared). If you're on SVR I'm not sure the bank is obliged to pass on rate cuts.

In the current situation, why shouldn't the banks be forced to pass the cut on? The cut is being made to encourage consumer confidence and spending, largely as a result of the mess made by the banking industry here and in the states - why then should the banks be the beneficiaries of the rate cut?

[DimPrawn]

What about people like me with £500K+ in savings accounts and no mortgage, credit card bills or loans?

How am I supposed to cope with 0% interest rates?

[weegordy]

Originally Posted by swamp

I don't see why the banks should be forced to pass the rate cut to their customers. If you have a tracker the bank will pass on the cut (unless your mortgage is collared). If you're on SVR I'm not sure the bank is obliged to pass on rate cuts.

i dont think that they have an obligation to pass the rate cuts on SVR... granted the SVR is based on a % above base rate, but indeed, the % above (in most cases) has just been increased to offset the cut- hence no major drop in SVR's.

Im not saying that they should be forced to introduce or pass on the cut in rate... however, if they dont, it kinda makes the whole rate cut exercise a waste of time. I do, however, appreciate that the cut in rate impacts more than just borrowing... however... in the main, this is why this has been done, to help borrowers.