Dimitri 11   10 #277 Posted January 22, 2010 This looks to me like something specific to Skipton, e.g. they want to reduce their lending so don't care about attracting new borrowers, but do see an opportunity to attract new savers. They're advertising a 5-year bond at 5.01%, which I think is pretty competitive. I don't think we can conclude from Skipton's rise that a BOE base rate hike is imminent. Plenty of commentators have suggested that it will stay at around 1% or less for at least another year, and stay fairly low for several years after that (but there's a lot of uncertainty about). As long as inflation doesn't get out of control, the recovery is weak, and there are buyers for gilts, rates will stay low.  Of course, interest rates will have to go up eventually. If you're on a low rate now, this is your chance to pay down your debt.  Yeah I was using Skipton as an example of what is to come should rates rise and not meaning that all lenders rates will rise just because Skipton's did. Merv King says the rise in inflation is a temporary thing so let's see and Labour would prefer rates to stay low until the election but the GE date is very close now with only a maximum of 4 1/2 months left. Share this post Link to post Share on other sites Share this content via...
Dimitri 11 Â Â 10 #278 Posted January 22, 2010 You can't win with these lot,my son was with the Skipton tied in so when the base rate was low he was still paying high,his deal came to an end in Dec and hey presto they bung it up. Â That's extremely unlucky. Is he going to look for another lender then? Share this post Link to post Share on other sites Share this content via...
wednesday1 Â Â 10 #279 Posted January 22, 2010 If inflation spirals out of control it surely won't matter where the BOE would like interest rates to be, they will just have to raise them. Â The increase in inflation, early in the year was expected by economists, it is expected to fall back sharply again after that. I heard a commentator on the radio the other morning saying that he expected interest rates to stay where they are for FIVE years! Most other commentators seem to think that interest rates will remain under 2percent for a long, long time. Share this post Link to post Share on other sites Share this content via...
ukdobby   223 #280 Posted January 23, 2010 That's extremely unlucky. Is he going to look for another lender then?  He's gonna try but with the price of his property coming down he would have to borrow 100% of worth now which I think he'd struggle to get. Share this post Link to post Share on other sites Share this content via...
Cyclone   10 #281 Posted January 23, 2010 The increase in inflation, early in the year was expected by economists, it is expected to fall back sharply again after that. I heard a commentator on the radio the other morning saying that he expected interest rates to stay where they are for FIVE years! Most other commentators seem to think that interest rates will remain under 2percent for a long, long time.  The rate that it increased was a surprise.  Markets were surprised on Tuesday by a record jump in annual inflation, prompting predictions that interest rates would have to rise sooner than previously ...  far higher than the expected increase to 2.6 per cent and well above the Bank of England’s target of 2 per cent. Share this post Link to post Share on other sites Share this content via...