UK GDP shows 0.7% contraction in 2012 Q2
25 July 2012, 04:34 PM
#31
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No this scheme is not like quantitative easing, it can't be used to shore up banks' balance sheets in the same way, that's why they've done it differently. HSBC have already said they won't be participating so there's no guarantee of success, but it is at least something, you can't accuse the Bank of not trying.
Regarding Libor, roughly speaking you got a lower fix on your mortgage because rates were reflected too low. So you probably owe hundreds if not thousands if you had a sizeable mortgage. Or is that a bit inconvenient?
Regarding Libor, roughly speaking you got a lower fix on your mortgage because rates were reflected too low. So you probably owe hundreds if not thousands if you had a sizeable mortgage. Or is that a bit inconvenient?
Surely, if the banks are saying that their inta-lending rate is higher (legally or not), officially, they will have to pass this on the their customers in the form of higher sv interest rates.
If not, then why have so many banks raised their rates?
25 July 2012, 04:42 PM
#32
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Sorry don't follow 
Libor rates were (and still are) artificially low. The real cost of money is a lot higher. Hence why banks are raising their cost of borrowing, as you mention.
Is the question about savings rates? If it is, then they would argue that those are more closely linked to the official base rate, and they'd be right.
Put it this way, with a non-functioning banking system you can almost justify any price, and the spread between borrowing and lending will be higher than ever.
Libor rates were (and still are) artificially low. The real cost of money is a lot higher. Hence why banks are raising their cost of borrowing, as you mention.
Is the question about savings rates? If it is, then they would argue that those are more closely linked to the official base rate, and they'd be right.
Put it this way, with a non-functioning banking system you can almost justify any price, and the spread between borrowing and lending will be higher than ever.
26 July 2012, 12:33 PM
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26 July 2012, 12:47 PM
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The Office of Budget Responsibility might as well throw these predictions in the bin, they predicted a 0.8% rise in the economy this year. 
http://budgetresponsibility.independ...ok-march-2012/
http://budgetresponsibility.independ...ok-march-2012/
26 July 2012, 02:05 PM
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Economic predictions are a bit like the weather in my opinion/experience - you're lucky if you get tomorrow right, let alone next week or next month...
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