U.K. interest rate rises to 3%.

[numnuts]

https://www.bbc.co.uk/news/business-63471725

 

'Bank of England raises UK interest rate by most in 33 years.'

[zArk]

Quote

The Bank believes by raising interest rates it will make it more expensive to borrow and encourage people not to spend money, easing the pressure on prices in the process.

 

except for food, energy, fuel, mortgages/rent

 

Jeremy Vine was talking about savers getting the benefit .... lol ...

[webtrekker]

Honestly, I don't know what all the panic is about. Compare today's rate with the rates in the 80's and 90's. They were HORRENDOUS! ...

 

 

Wait until they get above 10% THEN start panicking!

 

We bought our house in 1978 and lived there for 25 years until 2003.

 

After the huge rates of the 90's we found ourselves in negative equity, however the house prices started to rise again (luckily, I'll admit!) and we bailed out when they were at their best, making a £36,000 profit on our house after paying off the £40,000 mortgage. We then moved into social housing and for the last 19 years have paid less than £100 a week rent for a 3-bed semi that overlooks farmland and woodland. I would never move again or consider buying another house. In fact, now we're both pensioners, both out rent and Council Tax is heavily discounted.

 

 

 

[webtrekker]

1 hour ago, numnuts said:

https://www.bbc.co.uk/news/business-63471725

 

'Bank of England raises UK interest rate by most in 33 years.'

 

More dubious wording from the BBC.

 

Yes, the BoE has RAISED the rate more than it has done over the last 33 years, but it's still just 3% ,whereas 33 years ago (1989) it was at 15%, FIVE TIMES HIGHER than it is today!

 

 

 

[Covidiot]

3 hours ago, webtrekker said:

 

More dubious wording from the BBC.

 

Yes, the BoE has RAISED the rate more than it has done over the last 33 years, but it's still just 3% ,whereas 33 years ago (1989) it was at 15%, FIVE TIMES HIGHER than it is today!

 

 

 

 

It does not matter how high rates were in the past. That is totally irrelevant to today. Uk has a national debt of 2.8 trillion. People and gov cannot affort historic rates. All part of the plan to collapse fiat for replacing with CBDC's. The public are utter debt junkies. Watch for louder and louder calls for Gov to "do something" to help mortgage holders or indebted sheep. And do something they shall... Once the CBDC's come there will be a "debt reset" by which all will have their debts wiped on condition of giving up any assets you have....

 

You will own nothing and be happy!

[zArk]

4 hours ago, webtrekker said:

Honestly, I don't know what all the panic is about. Compare today's rate with the rates in the 80's and 90's. They were HORRENDOUS! ...

todays disparity between House prices and average wage swamps the interest rates of yester year

 

1997 average pric eof houses was 50k

 

then 2004 had tripled the house price to 150k

 

between 1997 and 2004 wages went from 17.5k to 24k

 

2021 house price is 240k (almost 500% since 1997)

2021 wage is around 29k  (about 65% since 1997)

 

the idea of 3 times wages for a mortgage are well gone.

 

now-a-days --- you got a pulse? heres a wedge for 40 years .

 

Olden money about a 1/3 of your earnings went on a mortgage 50k, when mortgage rates rose from 12% to 19%  a £500 mortgage hit £800

Energy , fuel, food didnt go mental at the same time

 

Today a mortgage on a 250k at 1.3% was £1000 around 40% of wage , now at 5.4%  is £1500

 

 

 

 

 

[bamboozooka]

in the 80's mortgages were around 8% norm so 15% mortgages were double monthly payments.

now mortgages were at 0.25% therefore an increase to 0.5% is double monthly payment.

at 3% mortgage payments go up 12 times

fooked

[zArk]

businesses are screwed further

[zArk]

and with the worry of house prices falling how will landlords react?

 

clearly they will have to put up rent

or

sell the houses quick reducing the rental market which in turn supply and demand will make rent increases higher

 

the fall out of non-paying renters from COVID is still rumbling on ... landlords will see this as big time theft from their pockets

[Shy Talk]

Apologies to the OP, but a similar thread was started in summer 2021 with this opener which probably belongs in here:

 

Thinking about how they might pull off making the vast majority dependent on the state without being completely blatant (taking down the internet/crashing the banks/alien invasion/food shortages etc) and risking civil disobedience, I wonder if they may just go the safer interest rate route. From a quick check, the biggest rise in recent memory was around 10% in the space of 18 months in the late 70s (and that from a higher starting point than today's historical lows). If they rose even 5% in a similar period in the near future it would cripple vast numbers with mortgages (especially those who were enticed to buy due to the stamp duty holiday and those made redundant after furlough ends). This way people would be more likely to shrug their shoulders and accept their fate, whereas crashing the banks/internet etc would potentially lead to much more volatility. Or is that what they really want?

[Mr H]

On 11/3/2022 at 7:21 AM, webtrekker said:

Honestly, I don't know what all the panic is about. Compare today's rate with the rates in the 80's and 90's. They were HORRENDOUS! ...

 

 

Wait until they get above 10% THEN start panicking!

 

We bought our house in 1978 and lived there for 25 years until 2003.

 

After the huge rates of the 90's we found ourselves in negative equity, however the house prices started to rise again (luckily, I'll admit!) and we bailed out when they were at their best, making a £36,000 profit on our house after paying off the £40,000 mortgage. We then moved into social housing and for the last 19 years have paid less than £100 a week rent for a 3-bed semi that overlooks farmland and woodland. I would never move again or consider buying another house. In fact, now we're both pensioners, both out rent and Council Tax is heavily discounted.

 

 

 

Indeed. Interest rates have a cycle. From top of my head it's circa 30 year cycle. So the hikes not gonna end anytime soon.  It's actually completely nuts to have the cost of money at 0 or negative%!!! 

 

It's not really the BOE that raises rates though. officially they do, but it's the market that raises rates and BOE tries to play catch up 

[Mr H]

On 11/5/2022 at 1:36 AM, zArk said:

and with the worry of house prices falling how will landlords react?

 

clearly they will have to put up rent

or

sell the houses quick reducing the rental market which in turn supply and demand will make rent increases higher

 

the fall out of non-paying renters from COVID is still rumbling on ... landlords will see this as big time theft from their pockets

No one born today or the past 20 years can realistically afford to buy a house in the uk without the help of their parents. I'm sure a mighty drop to something that is manageable will be welcomed by most. 

 

I don't think adjustable rate mortgages is as popular here as in other countries, so I'm sure most prudent landlords won't be affected. I'm not sure why anyone wouldn't have fixed it when its virtually 0%! What were you hoping it varied to from there?

[DaleP]

Look at the interest rate in Laos.

https://tradingeconomics.com/laos/interest-rate

 

Time to open a bank account over there if you want to keep cash savings?

 

Zimbabwe....200%! Worthwhile leaving £1000 and just let it roll?

https://tradingeconomics.com/country-list/interest-rate?continent=world

Edited January 12 by DaleP