Question Why lower interest rates?

[Embattle]

Governments etc can only do so much to stimulate a market, in essence they are hoping to buck the trend with another interest rate cut and for many it'll help but it is unlikely to have the effect of helping people open there wallets or make the banks etc loan money.

 

[MYstIC G]

I don't think the interest rate cut is designed to bolster anything but simply slow down and stabilise the economy.

If you take the average joe, who's got a mortgage of whatever value, this means he can once again be certain that he can afford his mortgage repayments (unless his lenders are being supergay). He's unlikely to splurge his extra cash after watching the news (I was going to say reading but this is average joe) but he will be able to afford his increased council tax bill when it hits next year. Also his employer won't have to give him a pay rise in these "troubled times" and will no doubt say things like "surely your mortgage isn't costing you any more now, the rates have gone down".

Personally I think its designed to protect the governments income streams going forward, little more.

 

[Cadelin]

I just got a letter from my bank, the interest on my little savings that aren't in my ISA has been cut to 2.75%. Anybody know any good (and save!) saving accounts at the moment? I have a few thousand to invest and need instant access. The tesco saver accounts looks good at the moment.

 

[00dave]

Well my my saving account is with nationwide and I heard something on the news that they're not cutting their interest rates. Not confirmed though I was still half asleep when I head it.

 

[Scouse]

George Osborne is to attack Labour's "euro-fanatics" following speculation that senior government figures have talked of joining the single currency

European Commission boss Jose Manuel Barroso caused a stir after saying recently that he believed the UK was "closer than ever" to joining the euro....Mr Barroso said "the people who matter in Britain are currently thinking about it"

Whaddaya reckon Chilly? Pipe dream eh?

 

[Chilly]

Still rules to entry. If we dont qualify we cant join!

 

[Scouse]

Do you honestly believe they wouldn't break the rules if politically convenient?

 

[Chilly]

define "they".

The uk government can apply all they want, but they'll get accepted if:
1) we meet the requirements and it seems like a good idea at the time
2) europe says "awww, poor UK, we'll let you in"

Personally, I dont want my currency being partially controlled by emerging nations such at the eastern european crew who will quite shortly all turn into rubble and shite as the outsourcing racket dries up and no **** invests in property there.

 

[Mey]

It means that all the bank employees who have Staff Base Rate mortages are saving loads a month

 

[Chilly]

bah, imagine a 2% mortgage!

 

[Tom]

I'm on a fixed rate mortgage, I think it has a year left to go. Its bloody typical, when I got this one most predictions were that interest rates would rise.

 

[Scouse]

I'm on a fixed rate mortgage, I think it has a year left to go. Its bloody typical, when I got this one most predictions were that interest rates would rise.

What I'm miffed about is all the "help" that the feckless poor are getting - I actually saved up when the going was good rather than piss all my money up the wall thinking it was going to last forever.

What I should have done is bankrupt myself buying champagne and shagging cheap whores whilst doing line after line of coke and then whinged when it all turned bad safe in the knowledge that I'd get bailed out

 

[old.user4556]

bah, imagine a 2% mortgage!

*waves*

 

[Embattle]

define "they".

The uk government can apply all they want, but they'll get accepted if:
1) we meet the requirements and it seems like a good idea at the time
2) europe says "awww, poor UK, we'll let you in"

Personally, I dont want my currency being partially controlled by emerging nations such at the eastern european crew who will quite shortly all turn into rubble and shite as the outsourcing racket dries up and no **** invests in property there.

The boat on the other side of the channel isn't any more stable than on this side.

 

[SilverHood]

Work gave up trying to pay us in Sterling and now pay my in USD.

I'm earning some £9k more a year than I was 8 months ago. Not bad for a person whose been out of uni for just over a year.

The strategy of sinking the sterling is a long term one. It will basically force the UK to produce more goods since importing wont be viable. This diversifies the economy, and should provide the boost needed to get out of recession, or at the very least, balance the trade deficit the UK suffers from.

The alternative is to do like the Russian central bank with the Rouble and try to artificially inflate the value of the sterling, causing hyperinflation, eventually resulting in a big crash, or if they're lucky, some sort of stability overall and the end of the road, before their economy implodes.

It's really the lesser evil. With the European Central Bank having no fucking clue, investors are also likely to prefer the UK for investment compared to the Eurozone, which should restore the strength of the Sterling down the line, since the UK will recover before the Euro using countries.

 

[dysfunction]

Sterling was already over valued which has also added fuel to its dropping value.

 

[Chilly]

so we're doing the same cheap trick the US did a few years back by massively devaluing sterling to boost exports and industry, narrowing the trade deficit. Good for us, bad for everyone else.

 

[rynnor]

so we're doing the same cheap trick the US did a few years back by massively devaluing sterling to boost exports and industry, narrowing the trade deficit. Good for us, bad for everyone else.

I dont think it will work for us - we are a service based economy and its that area thats getting hammered.

We dont have enough of a manufacturing sector left to benefit from the low value of sterling and expensive imports could actually worsen our position - it all depends how bad you think the recession will be.

If its bad enough we could actually end up with less of a manufacturing base and an uncontrollable defecit.

 

[Bugz]

Inflation is about to hit a massive low - so the interest rate cuts are being put into place to coordinate with this a massive increase in demand.

Least that's what I think they are trying to do. Whether it'll work or not is hard to say.

 

[lecter]

Actually a decrease in the pound is just what we need at the moment. We've had it too good for too long and it has killed our businesses. The growth in salaries over the past 8 years have been fueled by corporate debt and mortgage debt. In reality the economy has shrunk in the past 8 years thanks to outsourcing. In todays globalised economy salaries relative to the US are now 75% (80% against the euro) compared to what they were. This wont help our trade deficit in the short term and the retail industry will suffer. But this will balance things out.

 

[Scouse]

Wow! So many different opinions in one thread!

Perhaps nobody really has a clue, eh? Just *maybe*?

 

[old.user4556]

Of course noone knows what's going to happen, other than in the short term mortgages for some will get cheaper and savers will get less than fuck all return on savings.