Reply to: DOOM: Banks

[jamesbrown]

FOG.

[JustKeepSwimming]

That’s different because it would lead to a vast outflow of capital from the private to public sector, funded by the taxpayer. That said, they probably shouldn’t meddle beyond supporting competition among banks and making it easier for challenger banks. You can pretty much forget about the high st banking cartel, but there should be decent savings rates elsewhere.

US T bonds are 5%+, including 3/6/9 months. So i'm not convinced there would be significant capital outflows.

[vetran]

It’s a paid extra now - welcome to Tory Scum deflation…

Well you are choosy about the kebab composition what do you expect?

http://www.grouprecipes.com/84745/ch...rel-kebab.html

[northernladuk]

Fine by me. Feel free to hammer mortgage holders even more

Word.

[AtW]

Do they serve a salad with the kebabs now?

It’s a paid extra now - welcome to Tory Scum deflation…

[sadkingbilly]

Do they serve a salad with the kebabs now?

quinoa salad

[jamesbrown]

my (posh) local area

Do they serve a salad with the kebabs now?

[AtW]

Who knows, in the US they have really long mortgage fixes, 15 years or more. They raised rates and inflation fell back pretty quick..

They’d use equally long financing for those mortgages - backed by underlying security too, so less of a problem. But UK banks found a new way in banking - long term fix to earn money funded by short term funding, albeit from what they consider is a “captive audience”

[AtW]

Perhaps the margins to which banks are 'entitled' are higher now?

This too, plus lots of branch closures - my (posh) local area had 5-6 bank branches, now only 1.

[SueEllen]

With most people on fixed rates, interest rates don't work as well, as a lever, for the BoE as they used to a few decades ago.

When interest rates were put up in the late 80s, it had an immediate effect. Now its a slow motion car crash.

There is a minimum of an 18 month lead on interest rate rises. So the BoE is going to over shoot if they keep raising interest rates.

[vetran]

More like 7% excluding bonuses (Feb to April 23), so again, best of luck trying to tame inflation.

Speak for yourself I am struggling by on 11% raise this year.

[dsc]

Who knows, in the US they have really long mortgage fixes, 15 years or more. They raised rates and inflation fell back pretty quick.

In the UK it looks like we had a wage and benefits spiral. Pensions and other Benefits and Minimum wage all got 10% increases. Everyone else got around 6% (except us contractors).

More like 7% excluding bonuses (Feb to April 23), so again, best of luck trying to tame inflation.

[Fraidycat]

With most people on fixed rates, interest rates don't work as well, as a lever, for the BoE as they used to a few decades ago.

When interest rates were put up in the late 80s, it had an immediate effect. Now its a slow motion car crash.

Who knows, in the US they have really long mortgage fixes, 15 years or more. They raised rates and inflation fell back pretty quick.

In the UK it looks like we had a wage and benefits spiral. Pensions and other Benefits and Minimum wage all got 10% increases. Everyone else got around 6% (except us contractors).

[dsc]

Eric Leenders, managing director of personal finance at UK Finance, said banks are “acutely aware” of the need to pass on interest rates and have worked hard to be fair.

He added: “If we wanted to pay savers more then we’d have to charge mortgage borrowers more.”

The comments come amid widespread criticism of banks for increasing mortgage rates more quickly than returns on easy access accounts.

For example, Santander and Barclays only pay 0.85pc interest on savings but charge 6.03pc and 6.83pc respectively for a two-year fixed-rate mortgage after repeated increases in line with the rising Bank Rate.

Interest rates are at 5% and they say they worked hard to be fair and offer 0.85%. My ass.

What sort of ponzi scheme is this tulipe? Good luck trying to tame inflation with interest rates if you've rigged the system so much that it no longer works.

[Protagoras]

Wince before 2008 - it was normal for banks to have savings rates close to BoE rate and mortgages rates were +2%

Perhaps the margins to which banks are 'entitled' are higher now?