Bank of England Base rate & other news

[JustKeepSwimming]

Bank Rate increased to 5.25% - August 2023

Full report here:

https://www.bankofengland.co.uk/mone...23/august-2023

If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required. The MPC would ensure that Bank Rate was sufficiently restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term, in line with its remit.

Low rates aren't coming back.

[northernladuk]

Looks like someone has accidently dug up the green shoots of recovery.

[Fraidycat]

Great news again this month!

How is lower contract rates and more bench time great news for us contractors?

If you meant more interest on your savings, interest on cash is not keeping up with inflation either. Better to earn 0% when inflation is 2% than 3% (after tax) when inflation is 8%.

[Martin@AS Financial]

Ultra low fixed rates may not be on the cards, but the price of fixed rate money is gradually coming down and hopefully this will continue as banks look to try and hit their lending targets for the year.

Santander have just this morning announced fixed rate reductions of upto 0.39% across their residential and buy to let portfolio.

[jamesbrown]

Up to 0.39%. Chuckle. How about an increase in average 2yr fix rates from 2.85% to 6.85% in two years? High rates are here for longer, which is a good thing, unless you’re hawking finance, I suppose. Ultra low is a massive red herring. Persistently high, more like.

[JustKeepSwimming]

Ultra low fixed rates may not be on the cards, but the price of fixed rate money is gradually coming down and hopefully this will continue as banks look to try and hit their lending targets for the year.

Santander have just this morning announced fixed rate reductions of upto 0.39% across their residential and buy to let portfolio.

I wouldn't really say they are coming down, more stabilising. The markets are growing in confidence that rates will peak at 5.5-6%. That feeds into lender confidence on price setting.

[jamesbrown]

Slight hawkish bias on the committee too with two votes for 0.5%. Another couple of hikes to come, at least.

[JustKeepSwimming]

Slight hawkish bias on the committee too with two votes for 0.5%. Another couple of hikes to come, at least.

I agree, central banks tend to go a few steps past what most people think and the data suggests. Putting a few extra rounds into the corpse to make sure.

I think the Fed is probably going to have one maybe two raises this year and then be done. Our data is a bit more iffy.

[GigiBronz]

Up to 0.39%. Chuckle. How about an increase in average 2yr fix rates from 2.85% to 6.85% in two years? High rates are here for longer, which is a good thing, unless you’re hawking finance, I suppose. Ultra low is a massive red herring. Persistently high, more like.

There is so much money slushing around that the rich, very rich and investment funds could prefer to put towards the hard assets. If you look at the money supply figures they are astronomical and they get stashed in offshore banking somewhere until they could be put to better use.

That's why we also have inflation, due to poorly (probably intentional) chosen economic policies, not because of furlough money that people got during covid.

The inflation metric is heavily fudged, but interest rates would not start dropping until prices stabilise (that won't be anytime soon). And both inflation and hither rates are disconnected and deliberate policies by our beloved gov.

I don't think that houses will become more affordable anytime soon. Sure you could have a 40% drop but if rates go up you will still be outside the affordability rate.
But even if you can still afford it, with the cost of electricity, council tax, the amount you are throwing away in interest, you are better buying something in a different country. Move to Asia or S Europe.

Instead of paying 150 on council tax, 200 on electricity on average, most of your mortgage payment will be interest you are better saying good-bye to the dream and live like a nomad somewhere else.
A nomad is better than a slave.

[sadkingbilly]

The usual whining paranoid pish .

its back again