Who's afraid of the big bad rate rise?

[Martin@AS Financial]

Taken from BBC News:

"A whole generation of mortgage borrowers who have never seen a rate rise are in for a shock. When they can't afford it, spending will be slashed.
The slowdown will get worse. The economy will tank!
That, at least, is the scary story. And here's why it seems like it may be true.
The US central bank, the Federal Reserve, raised official interest rates from their post-crisis low last month, the first rise in nearly a decade. Historically, the UK tends to follow close behind.
And British households, with their record unsecured borrowing and sizeable mortgages, are more vulnerable to rate rises than they are over there".

Full story here:

Who's afraid of the big bad rate rise? - BBC News

[MrMarkyMark]

Who's afraid of the big bad rate rise?

No one, don't you know GBs houses are on the uptrend forever, its official.

[tomtomagain]

No one, don't you know GBs houses are on the uptrend forever, its official.

Certainly feels like it ....

[Martin@AS Financial]

No one, don't you know GBs houses are on the uptrend forever, its official.

It is certainly one of the more pessimistic articles I have read recently. The bulk of the article is formed around the opinions of Andrew Sentance who consistently banged the drum for a BOE rate increase.

[scooterscot]

The UK will not leave the EU. Simples. The UK is bankrupt. I repeat bankrupt. Debt to GDP is sailing north of 90%. We're completely exposed to external forces. The economy is not based on real skills but rather house prices, retail therapy, and shelf stackers. We've less gold than DA fillings. Assets prices over inflated.

The reset button needs to be pressed. Right now we have the luxury of saying when it'll be pressed or we can QE ourselves out of existence. We've never needed the EU more.


Germany debt to GDP 75%. Gold reserves 3381 tonnes
UK debt to GDP 91%. Gold reserves 310 LOL

[OwlHoot]

Imagine someone strapping a couple of canvas and feather wings to their back and jumping off a tower block frantically flapping their arms.

Worrying about a significant rate rise in the foreseeable future is a like expecting our intrepid aeronaut to soar away into the sky like an eagle.

[vetran]

Imagine someone strapping a couple of canvas and feather wings to their back and jumping off a tower block frantically flapping their arms.

Worrying about a significant rate rise in the foreseeable future is a like expecting our intrepid aeronaut to soar away into the sky like an eagle.

FTFY

how can you soar like an eagle when your surrounded by turkeys

[PurpleGorilla]

On the basis of PRI/CPI inflation, there isn't the upward pressure to raise rates. Sure we could follow the USA and put them up a bit to generate some wriggle room downwards in the next crash, but I can't see rates going up more than 2%.

However, rates should have gone up ages ago. Why? because of house price inflation.

The US moved to CPI and striped rents and house price inflation out of the measure when they liberalised under Regan.

But mortages and rent are the biggest cost, taking that out of the inflation pot is idiocy.

So rates should have been higher, and if anything, we should now be at the point where we want to lower them.

but we can't.

[tomtomagain]

The UK is bankrupt. I repeat bankrupt.

Tosh. The UK is not bankrupt. It is nowhere near bankrupt and never will be.

Bankruptcy is where you cannot pay your debts. The UK government has no problem servicing it's debt.

And if it did it would either a) tax more Or b) Print more ( or more likely a bit of both ).

The UK never went bankrupt after the First or Second World Wars. It isn't going to go bankrupt now.

[PurpleGorilla]

Tosh. The UK is not bankrupt. It is nowhere near bankrupt and never will be.

Bankruptcy is where you cannot pay your debts. The UK government has no problem servicing it's debt.

And if it did it would either a) tax more Or b) Print more ( or more likely a bit of both ).

The UK never went bankrupt after the First or Second World Wars. It isn't going to go bankrupt now.

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