BoE's Carney says base rate rise is 'moving closer'

[WordIsBond]

Savings rates are slowly climbing - possible to get 1.4% with 1 year fix in a big bank, and close to 2% in smaller ones.

This is due almost entirely to anticipation that base rates will be going up before long.

Raising the interest rate would push the pound v euro up even further thus jeopardising exports and deepening the recession

Interest rate differential is only one small component in currency exchange rates. Anyone who tells you the euro is low because of interest rate prospects is either ignorant or lying. There's this little thing about Greece, Portugal, etc, that is driving the euro lower. Neither currency is a haven for investors chasing higher yields, and won't be if we have a couple interest rate increases, either, so this is not likely to be a big factor.

And a small move in exchange rates isn't a big hit on exports, either.

And we aren't in a recession, anyway, by any normal definition of a recession.

Interest rates do need to rise. We're hammering savers to generate inflation to bail out debtors (including the government).

[Paddy]

This is due almost entirely to anticipation that base rates will be going up before long.


Interest rate differential is only one small component in currency exchange rates. Anyone who tells you the euro is low because of interest rate prospects is either ignorant or lying. There's this little thing about Greece, Portugal, etc, that is driving the euro lower. Neither currency is a haven for investors chasing higher yields, and won't be if we have a couple interest rate increases, either, so this is not likely to be a big factor.

And a small move in exchange rates isn't a big hit on exports, either.

And we aren't in a recession, anyway, by any normal definition of a recession.

Interest rates do need to rise. We're hammering savers to generate inflation to bail out debtors (including the government).

So if the Euro had an interest rate of 1% and GBP had a rate of 8%; it would make no difference to investors.

[d000hg]

Raising the interest rate would push the pound v euro up even further thus jeopardising exports and deepening the recession

What recession?

[shaunbhoy]

Interest rates do need to rise. We're hammering savers to generate inflation to bail out debtors (including the government).

Inflation is virtually flatlining, and there is no guarantee that rate rises will be passed on to savers.
Kinda blows a hole in your arguments, no?

[AtW]

Inflation is virtually flatlining

Yeah, those plasma TVs are getting cheaper by the hour.

[WordIsBond]

So if the Euro had an interest rate of 1% and GBP had a rate of 8%; it would make no difference to investors.

Reading comprehension isn't your strong point, is it?

Neither currency is a haven for investors chasing higher yields, and won't be if we have a couple interest rate increases, either, so this is not likely to be a big factor.

(emphasis added for the economically-challenged)

[AtW]

Reading comprehension isn't your strong point, is it?

It is actually, when compared to his other skills...

[WordIsBond]

Inflation is virtually flatlining, and there is no guarantee that rate rises will be passed on to savers.
Kinda blows a hole in your arguments, no?

No. Rate rises may not be entirely passed on to savers, but there's this thing about competition. Since even anticipation of rate rises has brought some increases in savings rates, it's a pretty sure thing that rate rises will help savers.

As to inflation flat-lining, we've had historically low rates since 2009 and we've been at 0.5 for over five years. Inflation has been far more than that, and those who saved have paid the price while those who borrowed have benefited.

[TykeMerc]

As to inflation flat-lining, we've had historically low rates since 2009 and we've been at 0.5 for over five years. Inflation has been far more than that, and those who saved have paid the price while those who borrowed have benefited.

That's nothing new, in fact it's the same as it was before the ultra low interest rates.
Cash savings in purely interest paying accounts have never kept pace with inflation, the only way to achieve higher than inflation has been via riskier investment vehicles.

[AtW]

Cash savings in purely interest paying accounts have never kept pace with inflation, the only way to achieve higher than inflation has been via riskier investment
vehicles.

Oh really? How about 5-6% interest rate in cash accounts back in the good days of Gordon Brown when inflation (official) was 2-3% max.





I'd gladly take what it was before, compared what it is now (inflation still 2-3% minimum, savings rates - 1% (and that's with extra "bonuses" ffs))