Any people in this thread must only be concerned with their well-being... and that's what economics is all about. The process of saving in life is important, so for you to write that off as irrelevant as part of some 'bigger picture' is pretty misguided!

The problem is that most experts you see in the media are mainly concerned with shouting the loudest and getting their views across, rather than enlightening people to soundly established facts based on cause and effect. What you end up with is an opinionated argument from opposing sides, leading to quite a bit of confusion among the general public as to what is going on.

How do you, for instance, decide which piece of advice to take, when two experts from prominent companies or research institutions have directly opposing 'views'?

This problem seems to have been around before the internet, but the internet and 24 hour news has multiplied it by a thousand.

 

It depends what you class as demand. If you doubled the money in every bank account in the world tonight, what would the demand be like tomorrow? And what would happen to prices? Would you then say there was increased demand in the sense that most people think of it?

 

http://www.thedailymash.co.uk/news/b...-201103083606/

 

Again, you're talking about the economy, but the people are the economy. The decision in life is usually between consuming now and consuming later, and that's the situation we're in right now (as a country). Interest rates have an effect, and the consequences will appear down the line. That is the bigger picture.

You're talking about what's good for the country; but what about what's good for you? Because what's good for you is good for the country. There isn't some mystical goal of a set of favourable figures - 'the greater good' - that will all make us better off.

As for what you were saying about companies being tipped over the edge: well if they're being prevented from going over the edge, they are being subsidised, whether with low interest rates or directly. And as I said in the first paragraph, they both have consequences. Ironically, many of these companies being subsidised actually cause the situation in which they need to receive it. All these retail companies on the brink... what do they add to the economy if no one is buying whatever they provide? It's funny that we all love competition and lower prices but, when market forces work to get rid of companies on our door step, or making up GDP figures, we want something done.

Considering the above, the people concerned with the 'greater good' of the country must actually be working towards the opposite? Subsidising people making losses and therefore creating losses for society.

 

You have just basically said there that I can disagree all I like - with relevant points - but I'll still be wrong. Good argument, I like it.

You're just looking at what you read in the papers, you aren't thinking about the bigger picture. It's very short-term thinking. But yes, you're right, it's the reason rates haven't gone up.

As for the only people benefiting being savers, it really depends on what you consider a benefit. Again it is short-term against long-term sustainability and structure.

 

Nobody bought a house at 0.5% so everyone who has a mortgage(thats linked to base rate) is now on the winning path,there saving hundreds of pounds a month..

To say most people couldnt afford an increase in mortgage payments is rubbish..

People have never had it so good when it comes to buying a house,if your overstretched and you couldnt afford even the tiniest of increases your a financial idiot!!

 

By that token the 'recession' was a global phenomenon so why are we trying to cure it with local monetary policy?

 

But the Government need people to spend money to drag this country out of the mire .Not hoard it in Banks earning interest .This is another reason to keep interest rates low ,to make it unatractive for people to leave it sat in the bank.

 

That is very naive.

 

People will keep spending money,even if they havent got it....

People tighten the purse strings for many reasons,usually when we feel that we are being ripped off,and many people do at the moment...

The cost of living in this country is very high at the moment. I personally havent had a wage rise for over 5 years but there isnt anything that can be done. The country is in a recession whether we like it or not,and things are starting to nip..

BUT....I have worked hard and paid off my mortgage,i have had many years of being prudent and going without stuff to achieve this. Now i am clear of a mortgage and try hard to save up some money,but recieve next to nothing in return from the banks as encouragement....My money is being used instead to bail out debtors that fail into insolvency and bankrupty...

Is it fair ?? No....it isnt..

 

OK. But whether they have their business subsidised or actual state handouts, it amounts to the same thing.

 

By that logic why don't they give most of Africa money to spend? Plenty of people there to create 'demand' and drag us out of this mess, and in far greater need. Hell, they'd make us all stinking rich.

And if this is the driver of growth, why haven't interest rates always been low or non-existent? It's a funny kind of logic which suggests that when you're in debt up to your eyeballs and have nothing to spend, you need to spend more to make yourself better off.

 

Retail drives our economy now not manufacturing.

 

It's a funny economy. We spend, others save and produce.

 

I see what your saying ,and congrats on getting rid of the mortgage "ball and chain ".Takes some doing .
Im not sure your money is being used to help out others though .It probably paid some fat bankers bonus .Low interest rates are allowing most people to pay their mortgage and survive ,as they probably have had little pay rises in the last few years also ,whilst everyday items ,including fuel ,petrol,food etc have gone up ridiculously beyond whats reasonable .Keeping rates low is trying to aid the economy to get back on its feet and drag the country up with it .
The banks are to blame for a lot of the predicament we are in due to lending to all and sundry way above what was repayable and your money is rewarding these ******* still .!!

 

But the same ******* were asking for the money...... They wanted there Barratt inspired dream!!!....lol......

Yes it was very iresponsible of the banks to give them the money,but that is my original point...If the person asking for the money didnt want a flash lifestyle and went modest and affordable then that person wouldnt be in a mess financially...
On the other hand,if there struggling to keep hold of there house because they couldnt see past the end of there Ikea corner suite,then i have no sympathy at all..

 

I think these you describe are the minority of Mortgaged people to be honest .The majority being fairly responsible people, who yes ,may have stretched themselves a bit but work hard and just want to keep the roof over their heads which is what the Government want .Most of these people are feeling the pinch with all the price rises and dont have a lot spare at the end of the month .
You should be chuffed that your mortgage is paid and you are in a much better position than most will ever be .Enjoy .I would even look at other ways of growing your money other than the bank .

 

"One in four mortgage holders are unaware that interest rates are at an historic low of 0.5%, research from Shelter shows.


The Bank of England kept interest rates at a record low of 0.5% today.

In a survey of more than 1,500 UK homeowners, 25% believe current interest rates are either higher or the same than they have been in the past or simply don’t know.

Within the 25% who are unaware, 9% of mortgage holders believe interest rates are slightly higher than they have been in the past, whilst 4% believe they are much higher than they have been previously.

The housing and homelessness charity is highlighting the research, conducted by the Council of Mortgage Lenders last year.

Shelter is warning the equivalent of 2.8 million homeowners may be completely unprepared for the costs of rising interest rates based on their lack of awareness about where they are currently.

Campbell Robb, chief executive of Shelter, says: “Even for those who have been managing to stay afloat so far, we know only too well that just a small increase in some people’s monthly outgoings will be the trigger that finally pushes them over the edge into a spiral of debt, repossession and possible homelessness.

“Millions of homeowners could be pushed to the brink unless they start making preparations now. We are urging people to find out if rising interest rates will affect them and prepare themselves for increasing mortgage costs by seeking advice early to help avoid putting their home at risk.”

Quite simply staggering results and an indicaion of the stupidity of many people - completely and utterly clueless!!

Source:- Mortgage Strategy

 

loved John Prescotts quote on Top Gear about being surprised that "you lot were going to buy 7 million cars"

Yes you did know!!!!! It was the whole plan!! let house prices go mad and everyone spends like mad thinking they are rich!!!

Well,everyone is back to square one now except with negative equity and one of those cars on the drive that made it look as though Labour were doing well and the economy was great

Pillocks

 

Negative Equity?

I'm not sure that has raised its head?

It's only negative if, at the time you come to sell, the house is worth less than the mortgage on it.

And no-one is selling at the moment.

 

Oh Dear ... looks like House Prices may have to fall ...

http://www.bbc.co.uk/news/business-12710836

 

I would have thought that should read 'hence no one is selling at the moment'

Bit difficult when you have a £300k mortgage and the agent tells you your house value is doing a swan dive and is worth £200k now

 

The UK housing market remained flat during March. Low sales levels and falling demand were apparent, with regional divergences widening, says the latest RICS UK Housing Market survey (12 April 2011).

Still stagnation in the Housing Market then?

 

I am still seeing property sell round my way .Some larger expensive ones as well .
A new build of about 5 or 6 houses on a smallish plot cheapest being 475k dearest being 675 k has sold 3 already and they are not finished .

Another one 500k plus sold by fine and country after being on market maybe 6 months .There is still money about by the look of it .

 

Yes, places are selling if priced correctly - a house I went to see when it appeared on the market sold in less than a day ..... it was priced right (while I was busy wondering what was wrong with it someone stepped in and bought!).

 

Umm story of your life I guess .!!