At what rate will the Bank of England stop increasing interest rates?

Question

6%, 7%? The BoE members who decide our mortgage payments earn enough money that their rate increases don't affect their own lives, but do they care about those whose finances are at bursting point already?

I'm just happy I have a mortgage less than than a third of my wages and only borrowed 80% of the asking price. Its those with 5 or 6 times their salary and in some cases 125% mortgages thats gonna hurt!

Answer 1

I can hope for higher, I don't have a mortgage or debts, so my savings are reaping the rewards, roll on I say.

Naturally, I feel for all those who have a mortage, though it is really something you should of afforded for and bought within your affordable means, though if you're suffering at the hands of other debts, it is entirely you're own fault, and part of the cause interest rates are so high.

Answer 2

They will stop raising rates when it has the desired effect. Given the level of financial sophistication of the average citizen it is anyone's guess what that rate will be.

Remember that the Bank has been told to control the level of inflation within certain limits and that it must do this by raising or lowering interest rates. It is a bit of a blunt instrument and may not be the best way of achieving this but it is usually effective. In any event, they have no choice in the matter.

Consider the alternative. If inflation is allowed to rise unchecked then it will affect many more people. Savings will effectively be wiped out (and that includes any pension fund you may have been paying in to). Food and other basics will cost more. The low earners will be hit disproportionately.

Ultimately we have hyper-inflation and that destroys currencies and, possibly, social systems as well.

Your comment about earnings is not really relevant. The extent to which rate rises affect you does not depend on your level of income but more on the extent to which you are overstretched.

Rate rises have a minimal effect on me but maybe I am lucky. I know many who earn three, four or five times my income who are struggling to keep up repayments on their borrowings.Most of these have spent money they didn't have on items they didn't need. Their choice, of course, but I don't see why I should be penalised for their lack of foresight.

Answer 3

BoE can decide what ever they think will result in economic effects they set. Speculation says it could go to 6% briefly this year and then return to present level. If your outgoings are affected significantly by interest rates then now is the time to make provision for a safety net - put extra money into savings so that you have a cushion if rates do go up significantly.

Answer 4

It can keep going up for me, I've got more savings than mortgage, but then I am an old git now.

I remember it being 15% in the late 80's, if you are struggling now to pay your mortgage then I suggest you've overspent on your house, and not allowed for this situation.

A little belt tightening is now required me thinks

Answer 5

So Sharon Williams has shown she knows not something? at first think of roughly what you have basically written, paying greater in Mortgages will rigidity you to spend much less in Tesco. except you have the flexibility to create your guy or woman money, it fairly is strictly what happens. somewhat different issues ensue to boot. The monetary employer has the flexibility to limit the quantity of income stream. however the monetary employer of england has the perfect activity of preserving inflation in examine, while the interest fee rises this makes it greater useful for savers. the clarification the expenditures are so low on the 2d is basically Political, if the industry were left to its own unfastened will, returned in 2008 interset expenditures could have long gone up, in all probability plenty bigger than maximum think of. this could have made saving plenty greater atractive, human beings could have stopped spending, greater to the element mark downs could have right away replenished the empty banks, a lot of merchants could have long gone insolvent, and the industry could have began with a sparkling slate. This whether became into politically not a risk, so particularly expenditures have been diminished, so human beings (in spite of the fact that paying down expenditures) did not start up saving and saved on spending. meanwhile international uncooked factors have been nevertheless going up in fee, this has the top results of forcing inflation. additionally the fee of West Texas oil became into starting to be forcing fees up. This has all come at the same time to offer us inflation. the government isn't desirous to shrink inflation basically yet, because it performs politically into their favour, yet while it somewhat is waiting, it is going to placed rigidity on the B of E to strengthen expenditures of interest and limit the quantity of income stream.

Answer 6

The answer here lies with not getting into a situation where you get over stretched.I remember back in the late 80s and early 90s when the interest rates hit 15% how do think we all coped with that?

Answer 7

I think they care;
If for no other reason than bank failure -
is not in their best interest,
nor is a run on the bank.

A LOST CROWN TO BE HAD
© 2007 by F.J. Brown

Supply and demand govern the cost of cash,
I saw on the curbside a sexy Lass,
I saw there beside her a lost crown to be had,
Which one I went home with is your guess lad.

Answer 8

In short, it depends on when Gordon Brown gets rumbled. Naturally, this won't happen until he's Prime Minister. He's often been described as the best Chancellor we've ever had.

I CAN GUARANTEE HE WILL BE SHOWN AS THE MOST DECEITFULL CHANCELLOR WE'VE EVER HAD.

Watch this space!

Answer 9

Don't know the rate but people have to stop living on credit and budget properly.

Answer 10

No they dont give a toss , thats all im saying cause it will get me started