Where will interest rate go from here?
10 January 2003, 04:34 PM
#1
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If you can correctly forecast the answer, you can make a lot of money.
The economy says they won't go up, exchange rates say they won't go down. The whole thing could be completely different in 3 months time. Exchange rates affect the cost of imported goods (ie, virtually everything in the shops these days) and the worse the exchange rate, the more imported goods cost, pushing up inflation. Recent monetary policy has been to use interest rates to curb demand and keep prices low. However, rates are so low that there is no point saving (as opposed to investing) at the moment and this is the only thing keeping share prices at their current level. If rates go up, company profits fall and investment money will move into bonds, destroying the stock market.
You could toss a coin
Telboy is your man on this.
The economy says they won't go up, exchange rates say they won't go down. The whole thing could be completely different in 3 months time. Exchange rates affect the cost of imported goods (ie, virtually everything in the shops these days) and the worse the exchange rate, the more imported goods cost, pushing up inflation. Recent monetary policy has been to use interest rates to curb demand and keep prices low. However, rates are so low that there is no point saving (as opposed to investing) at the moment and this is the only thing keeping share prices at their current level. If rates go up, company profits fall and investment money will move into bonds, destroying the stock market.
You could toss a coin
Telboy is your man on this.
10 January 2003, 05:11 PM
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Probably start drifitng down shortly if housing market cools - esp on the back on weak consumer spending figs and general malaise in the economy/markets plus threat of war/terrorism. Let's say at least 25bp cut by end of year - plus another if there's war.
So I'd get a variable or capped - you can get some really good 2yr deals - money is dirt cheap right now.
Don't think dollar/pound/euro currencies are so volatile to have a sole effect on interest rates nowadays - unlike latAm!
So I'd get a variable or capped - you can get some really good 2yr deals - money is dirt cheap right now.
Don't think dollar/pound/euro currencies are so volatile to have a sole effect on interest rates nowadays - unlike latAm!
10 January 2003, 06:50 PM
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Portman BS are doing a 1.75% deal fixed for 2 years check it out. A few screens to go through but it only takes a minute.
Cheers
Kav
Cheers
Kav
01 October 2003, 04:15 PM
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My current mortgage ends in Feb so I need to look around for the best product available.
Am interested in offset/flexible mortgages because I often have money sat in the bank and also get paid in big lumps at irregular intervals. However I think all flexible/offset mortgages are variable rate and I'm worried that the base rate can only really rise from where it currently is. In which case this could wipe out any of the advantages of these types of product.
But I don't know enough about interest rates. Is it inevitable that the base rate will go back up over say the next five years - in which case I'm probably better off with a fixed 5 year product, or might it drop even further in which case a variable or capped may be best. Or could it just hover around 4-5% for years in which case a variable flexible or offset might be fairly safe.
Aaaarghhh! Help...
[Edited by blip - 1/10/2003 4:16:54 PM]
Am interested in offset/flexible mortgages because I often have money sat in the bank and also get paid in big lumps at irregular intervals. However I think all flexible/offset mortgages are variable rate and I'm worried that the base rate can only really rise from where it currently is. In which case this could wipe out any of the advantages of these types of product.
But I don't know enough about interest rates. Is it inevitable that the base rate will go back up over say the next five years - in which case I'm probably better off with a fixed 5 year product, or might it drop even further in which case a variable or capped may be best. Or could it just hover around 4-5% for years in which case a variable flexible or offset might be fairly safe.
Aaaarghhh! Help...
[Edited by blip - 1/10/2003 4:16:54 PM]
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