Will interest rates go down then?

[sunnysan]

Rates

I think you may have the following options

The lenders will be reluctant to pass on interest rate cuts but may be under pressure from the government.

Since the governement aqlready own NR and now have significant holdings in many major banks/lenders you may start getting state backed mortages at better rates(Read, unprofitable on the open market, with the shortfall funded by the taxpayer)

But to answer your question, no their is nothing enforcing them to lend you money at any rate unless they are under contract to do so. Since your contract expires soon, they will offer you a product which is competitive within the current market

A bit of advice

If you relax your muscles it probably wont hurt as much

[dang65]

Can't make it any clearer than that?

Yes, the question was, is there really no legal requirement for lenders to reduce their interest rates to borrowers when the central bank reduces its rate? I presume you are saying, "No, there is no requirement", and I can understand that for very small changes, but I'm surprised to hear that it would apply to large reductions as well.

I mean, we all get grumpy when the price of oil drops but petrol and diesel don't. If the price of oil dropped big time, then I'd expect the government to step in if that wasn't passed on.

[Bagpuss]

There will be a lot of people looking for non existant deals when they come off the discounted SVRs. I'll take the keys forra fiver.. Doomed!/Boomed!

[DimPrawn]

Yes, the question was, is there really no legal requirement for lenders to reduce their interest rates to borrowers when the central bank reduces its rate? I presume you are saying, "No, there is no requirement", and I can understand that for very small changes, but I'm surprised to hear that it would apply to large reductions as well.

I mean, we all get grumpy when the price of oil drops but petrol and diesel don't. If the price of oil dropped big time, then I'd expect the government to step in if that wasn't passed on.

If you want more government control of everything, move to North Korea you bloody Communist.

[Mike Hunt]

But dont us taxpayers basically own most of the banks anyway,

whats to stop me walking into tulip west and asking for a 1% mortgage fixed for 22.75 years and when he tells me no , I can fire his ass

[dang65]

If you want more government control of everything, move to North Korea you bloody Communist.

What's the point of us voting (or not voting) for a government at all if we can't then expect them to act on our behalf when fuel companies/foreign governments/illegal immigrants/money-grabbing bankers don't play ball?

It's not about government control of everything, it's about government as representatives of the people and making sure we don't get completely ripped off. Especially when these financial places have caused the current problems in the first place and are being bailed out by money raised from the people.

The instinctive British fear of government control/nanny state, admirable though it is a lot of the time, does seem to stop beneficial and positive action being taken on our behalf as well.

[BoredBloke]

I'm glad that mine tracks .5% above the boe base rate until 2090. Can't see the rates going up much anytime soon.

[rootsnall]

Yes, interest rates are going to fall - a lot.

I don't think sterling will handle big rate cuts, they might try but I bet it ends in tears. shamateurnomics

[DimPrawn]

I don't think sterling will handle big rate cuts, they might try but I bet it ends in tears. shamateurnomics

Good for exports when one £ is worth 20c.

If only we exported something....

[Tensai]

I don't think sterling will handle big rate cuts, they might try but I bet it ends in tears. shamateurnomics

Current Bank Rate 4.5%
Current Inflation (CPI) 5.2%

Can anyone *knowledgeable* remind me of the practical medium term effects of negative interest rates? I seem to recall the Japanese had a rough time with that until very recently....

I could of course Google it but frankly can't be asred.