2007-07-05 01:32:49 · 18 answers · asked by Just for Laughs 4 in Politics & Government ➔ Government
Unacceptably high inflation continues to drive monetary policy in the UK.When the amount of money spent grows more quickly than the volume of output produced, inflation is the result. In this way, changes in interest rates are used to control inflation.
2007-07-05 02:53:27 · answer #1 · answered by Anonymous · 2⤊ 2⤋
In most cases the consumer and his/her spending/borrowing plays a huge part in the setting of Interest/Inflation rates. The average debt per person in this country without taking Mortgages into account is at an all time high i believe. The need to own the widest flattest TV or the smartest car in the road seems more important than balancing the books to some families. Spending next years earnings this year does the individual no good or the economy. But that's the world we live in. Spend today, panic tomorrow. Mick
2007-07-05 16:23:54 · answer #2 · answered by ? 5 · 1⤊ 2⤋
We can only blame this government as the Bank of England is raising the interest rate. Whilst Brown claimed the bank was independent that is nonsense as every board member has been appointed by the Treasury which was and is Brown. Darling is simply a Labour Party apparatchik who will do as he is told.
At the same time it has to be said that people are borrowing and spending well outside their means.
It's the old story of the Grasshopper and the Ant.
2007-07-06 05:20:37 · answer #3 · answered by Rob Roy 6 · 1⤊ 2⤋
The credit card companies, if for example you have £500.00 of credit and use and pay off one or two hundred pounds each month you will soon receive a letter informing you that your credit limit has been increased to £1,000.00.
If you do not agree with their action they expect you to inform them at your cost of postage.
This practise will continue until you find that you have a limit way beyond what you require and this is where the temptation begins unless you are a strong character.
This is why the country is trillions in debt and why the easy option is to hit mortgage borrowers instead of the credit card companies.
Its what the late Edward Heath called the unacceptable face of capitalism.
2007-07-05 12:26:43 · answer #4 · answered by Equaliser. 3 · 0⤊ 1⤋
Why should we 'blame' anyone? Why do people immediately think that an interest rise is something to which 'blame' should be attached. Many people in this country, particularly the older generations, have paid off their mortgage and, having only a pension income have to live off their savings. A reasonable rate of interest is absolutely necessary for these, largely prudent, people to enjoy a reasonable standard of life. The ones who suffer from high interest rates are mainly those who borrow imprudently due to the fact that they believe they have a 'right' to succeed in business and a 'right' to a luxurious life style. The only people I feel sorry for when a rate rise is announced are young people who would have every intention of living a reasonable lifestyle, within their means, who find the giddy price rises in property combined with higher mortgage payments means that they cannot buy their own house.....
2007-07-05 08:52:32 · answer #5 · answered by eriverpipe 7 · 3⤊ 3⤋
Strong economy. The fed raises interest rates when the economy is strong, they lower them when the economy is weak.
They raise them to maximize return on investment, for businesses, credit companies and consumers. Yes mortages become more expensive, but also banks give better interest. Which your retirement fund will grow faster, companies who have large amounts of money in the bank will make more money, increasing their profits and paying more in dividends.
When the economy is slow, they lower interest rates to entice people and businesses into opening lines of credit, to stimulate the market. When the interest rates start to slow the economy they will stop raising rates, or will bring the increses at longer intervals.
2007-07-05 08:41:14 · answer #6 · answered by Angelus2007 4 · 0⤊ 0⤋
I blame people for constantly overstretching themselves to get on the property ladder. If people stopped buying houses the prices would drop and we wouldn't have to borrow so much. If borrowing drops then interest rates would drop.
Also the buy to let and the people who own more than one house are a big contributing factor.
2007-07-05 09:07:46 · answer #7 · answered by Simon H 2 · 3⤊ 0⤋
Feckless! 1 up on the Jones's, who want what they cannot really afford, aided and abetted by the corporate money grabbers. I truly believe the govt has slyly wagged a finger in the banks direction, in order to bring some order to the chaos.
2007-07-05 16:11:19 · answer #8 · answered by wisernow 3 · 1⤊ 0⤋
Interest rates have not been rising for quite some time now and are still low by historical standards.
2007-07-05 12:31:36 · answer #9 · answered by Pleboid 2 · 2⤊ 0⤋
Blame me I have £34 in the Bank and asked them to jack up the rate giving me more interest.
2007-07-05 21:53:15 · answer #10 · answered by realdolby 5 · 0⤊ 1⤋