It's doing wonders for Sterling.
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A big rate cut at last !!?? I hope........
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Originally posted by b0redom View PostMuch as though I am loathe to admit it, the CyberCretin is partly right. Lowering the interest rate in times of depression can get things moving BUT in this current market, it only makes sense to lend to people who can afford to pay it back.
The problems we're in at the moment are caused at least partially by low credit cost, and the banks lending to people who had no way of realistically paying it back.
In addition, lowering the interest rates will weaken the exchange rate, hopefully convincing people to buy more British stuff (domestically and Internationally). Of course the rest of the world is in recession too, so basically we're stuffed.
*DOOMED*
Very few people will want or even be able to afford to borrow at this time so low rates are not a problem at all. This is the real worry because it could make a depression out of a recession. I repeat, the main reason for low rates is to give businesses and consumers more disposable funds.Comment
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Originally posted by bobhope View PostIt's doing wonders for Sterling.
Sterling is falling because we are in a recession and interest rates must fall, so funds etc are withdrawing their investments. This means that they are selling pounds and thus it will push the exchange rate down.
This disaster could have been avoided by cutting rates much earlier.Comment
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Originally posted by Cyberman View PostThis was at the start of the credit crunch and moneymarkets drying up which was already building in the USA in June last year. The USA immediately made massive cuts to their interest rates. We ignored it!!
1/ How to maintain reasonable lending to business in order to keep the economy buoyant
2/ How to control the inflationary pressures of conspicuous consumption fuelled by a credit boom
You cannot simply reduce interest rates to solve both problems.
So, lets have your solution on how to contol both while adhering to the conservative principle of using interets rates as a tool to control inflationary pressures. You only seem to see this as a simple problem.The court heard Darren Upton had written a letter to Judge Sally Cahill QC saying he wasn’t “a typical inmate of prison”.
But the judge said: “That simply demonstrates your arrogance continues. You are typical. Inmates of prison are people who are dishonest. You are a thoroughly dishonestly man motivated by your own selfish greed.”Comment
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Originally posted by Cyberman View PostSterling is falling because we are in a recession and interest rates must fall, so funds etc are withdrawing their investments. This means that they are selling pounds and thus it will push the exchange rate down.
This disaster could have been avoided by cutting rates much earlier.
This disaster could have been avoided by raising rates even earlier to cut off the excessive borrowing/spending by individuals, companies, but especially government.How did this happen? Who's to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you're looking for the guilty, you need only look into a mirror.
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Originally posted by swamp View PostHope we get a massive rate cut, I'm on a full-term tracker mortgageJust call me Matron - Too many handbagsComment
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Originally posted by Bagpuss View PostI think you are missunderstanding the problem here. We have 2 issues:
1/ How to maintain reasonable lending to business in order to keep the economy buoyant
2/ How to control the inflationary pressures of conspicuous consumption fuelled by a credit boom
You cannot simply reduce interest rates to solve both problems.
So, lets have your solution on how to contol both while adhering to the conservative principle of using interets rates as a tool to control inflationary pressures. You only seem to see this as a simple problem.
In a recession people do not spend. They save because they are worried about their jobs.
HMG would love a spending boom now because it will help to secure jobs, but the fact is that it simply will not happen and a million plus people will lose their jobs.
You seem to be still worried about inflation. Petrol is now 95p today, from 1.20p a few weeks ago and commodity prices are dropping off a cliff because worldwide demand is falling due to RECESSION. It is you who seems to be under a misapprehension.Comment
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Originally posted by HairyArsedBloke View PostThis disaster could have been avoided by raising rates even earlier to cut off the excessive borrowing/spending by individuals, companies, but especially government.“The period of the disintegration of the European Union has begun. And the first vessel to have departed is Britain”Comment
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Originally posted by zara_backdog View PostMe to at this rate we will be able to pay off the mortgage
Have you read my earlier info regarding mortgage 'collars' ? Not all banks will reduce rates below about 3.5%.Comment
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Originally posted by Cyberman View PostIn a recession people do not spend. They save because they are worried about their jobs.
HMG would love a spending boom now because it will help to secure jobs, but the fact is that it simply will not happen and a million plus people will lose their jobs.
You seem to be still worried about inflation. Petrol is now 95p today, from 1.20p a few weeks ago and commodity prices are dropping off a cliff because worldwide demand is falling due to RECESSION. It is you who seems to be under a misapprehension.
Please then explain the effects on
1/ and 2/
as outlined before. I'm interested to know how lower interest rates would have controlled the credit boom and stopped us heading into recessionLast edited by Bagpuss; 24 October 2008, 11:51.The court heard Darren Upton had written a letter to Judge Sally Cahill QC saying he wasn’t “a typical inmate of prison”.
But the judge said: “That simply demonstrates your arrogance continues. You are typical. Inmates of prison are people who are dishonest. You are a thoroughly dishonestly man motivated by your own selfish greed.”Comment
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