Mortgage advice needed

[Uncle Spielberg]

0.5% bank rate is a panic measure. It is a last resort. With inflation at 4% , BBR should be around 6% at the moment. BBR has averaged just under 9% over the last 20 years and never in the 400 year history of the Bank of England interest rate has it been below 2% before 2009. Make of that what you will. 0.5% is actually hugely damaging long term, to the economy, to savers, who outnumber borrowers, to pensioners and sends a message to the World's economies that ours is f*cked.

 

[Bozza]

0.5% bank rate is a panic measure. It is a last resort. With inflation at 4% , BBR should be around 6% at the moment. BBR has averaged just under 9% over the last 20 years and never in the 400 year history of the Bank of England interest rate has it been below 2% before 2009. Make of that what you will. 0.5% is actually hugely damaging long term, to the economy, to savers, who outnumber borrowers, to pensioners and sends a message to the World's economies that ours is f*cked.

You come back to NSC and write steaming piles of crap like this - you don't help yourself.

"BBR should be around 6% at the moment" - define 'should'.

Oh, and I've just calculated the average BoE base rate over the last 20 years and it's 5.26%. Not 9%.

 

[Uncle Spielberg]

Nice to talk to you as well Darren. BBR should be above the inflation rate as historically it always has been , around 1-2% above usually. In its 400 year history the BBR has never been 3.5% below inflation. Steaming piles of crap. Very intelligent Darren. Well done mate.

 

[Simster]

Nice to talk to you as well Darren. BBR should be above the inflation rate as historically it always has been , around 1-2% above usually. In its 400 year history the BBR has never been 3.5% below inflation. Steaming piles of crap. Very intelligent Darren. Well done mate.

I'm not going to argue with your figures despite them being disputed by Darren, BUT can you clarify why in your opinion:

0.5% is a panic measure? Rather an odd thing to say given how long it's now been at that rate.
How it sends a message that our economy is f***ed? We're in a far better state than many if not most European partners.

To be honest, if you read what you write, you sound like you're trying to be the definitive authority on such matters, without bothering to get your facts right, or providing even anecdotal evidence to back up what you say. You can't be surprised when people absolutely rubbish what you say under those circumstances. I guess the reason you take it so personally is that you are guilty of this time and time again and never seem to learn.

 

[Bozza]

Nice to talk to you as well Darren. BBR should be above the inflation rate as historically it always has been , around 1-2% above usually. In its 400 year history the BBR has never been 3.5% below inflation. Steaming piles of crap. Very intelligent Darren. Well done mate.

I wanted to communicate at a level you understood, so I used the same line of debate you took to the Social Network discussion.

Right, so, to be clear you believe the single determining factor in setting the BoE base rate is pretty much "What is inflation currently - we need to add a little bit on top of that"?

I think the world is a little bit more complicated than that.

Can you demonstrate how you think the average rate over the last 20 years has been c9% please.

 

[Bozza]

5.26%, thus:

31-Mar-91 12.75
30-Apr-91 12.07
31-May-91 11.76
30-Jun-91 11.38
31-Jul-91 11.07
31-Aug-91 10.88
30-Sep-91 10.42
31-Oct-91 10.38
30-Nov-91 10.38
31-Dec-91 10.38
31-Jan-92 10.38
29-Feb-92 10.38
31-Mar-92 10.38
30-Apr-92 10.38
31-May-92 9.9
30-Jun-92 9.88
31-Jul-92 9.88
31-Aug-92 9.88
30-Sep-92 9.56
31-Oct-92 8.38
30-Nov-92 7.3
31-Dec-92 6.88
31-Jan-93 6.68
28-Feb-93 5.88
31-Mar-93 5.88
30-Apr-93 5.88
31-May-93 5.88
30-Jun-93 5.88
31-Jul-93 5.88
31-Aug-93 5.88
30-Sep-93 5.88
31-Oct-93 5.88
30-Nov-93 5.74
31-Dec-93 5.38
31-Jan-94 5.38
28-Feb-94 5.19
31-Mar-94 5.13
30-Apr-94 5.13
31-May-94 5.13
30-Jun-94 5.13
31-Jul-94 5.13
31-Aug-94 5.13
30-Sep-94 5.47
31-Oct-94 5.63
30-Nov-94 5.63
31-Dec-94 6.03
31-Jan-95 6.13
28-Feb-95 6.6
31-Mar-95 6.63
30-Apr-95 6.63
31-May-95 6.63
30-Jun-95 6.63
31-Jul-95 6.63
31-Aug-95 6.63
30-Sep-95 6.63
31-Oct-95 6.63
30-Nov-95 6.63
31-Dec-95 6.48
31-Jan-96 6.26
29-Feb-96 6.13
31-Mar-96 5.98
30-Apr-96 5.94
31-May-96 5.94
30-Jun-96 5.73
31-Jul-96 5.69
31-Aug-96 5.69
30-Sep-96 5.69
31-Oct-96 5.71
30-Nov-96 5.94
31-Dec-96 5.94
31-Jan-97 5.94
28-Feb-97 5.94
31-Mar-97 5.94
30-Apr-97 5.94
31-May-97 6.22
30-Jun-97 6.45
31-Jul-97 6.67
31-Aug-97 6.95
30-Sep-97 7
31-Oct-97 7
30-Nov-97 7.21
31-Dec-97 7.25
31-Jan-98 7.25
28-Feb-98 7.25
31-Mar-98 7.25
30-Apr-98 7.25
31-May-98 7.25
30-Jun-98 7.47
31-Jul-98 7.5
31-Aug-98 7.5
30-Sep-98 7.5
31-Oct-98 7.31
30-Nov-98 6.82
31-Dec-98 6.42
31-Jan-99 6.04
28-Feb-99 5.58
31-Mar-99 5.5
30-Apr-99 5.29
31-May-99 5.25
30-Jun-99 5.08
31-Jul-99 5
31-Aug-99 5
30-Sep-99 5.19
31-Oct-99 5.25
30-Nov-99 5.47
31-Dec-99 5.5
31-Jan-00 5.66
29-Feb-00 5.92
31-Mar-00 6
30-Apr-00 6
31-May-00 6
30-Jun-00 6
31-Jul-00 6
31-Aug-00 6
30-Sep-00 6
31-Oct-00 6
30-Nov-00 6
31-Dec-00 6
31-Jan-01 6
28-Feb-01 5.81
31-Mar-01 5.75
30-Apr-01 5.54
31-May-01 5.32
30-Jun-01 5.25
31-Jul-01 5.25
31-Aug-01 5.01
30-Sep-01 4.89
31-Oct-01 4.53
30-Nov-01 4.11
31-Dec-01 4
31-Jan-02 4
28-Feb-02 4
31-Mar-02 4
30-Apr-02 4
31-May-02 4
30-Jun-02 4
31-Jul-02 4
31-Aug-02 4
30-Sep-02 4
31-Oct-02 4
30-Nov-02 4
31-Dec-02 4
31-Jan-03 4
28-Feb-03 3.79
31-Mar-03 3.75
30-Apr-03 3.75
31-May-03 3.75
30-Jun-03 3.75
31-Jul-03 3.58
31-Aug-03 3.5
30-Sep-03 3.5
31-Oct-03 3.5
30-Nov-03 3.71
31-Dec-03 3.75
31-Jan-04 3.75
29-Feb-04 3.96
31-Mar-04 4
30-Apr-04 4
31-May-04 4.22
30-Jun-04 4.42
31-Jul-04 4.5
31-Aug-04 4.71
30-Sep-04 4.75
31-Oct-04 4.75
30-Nov-04 4.75
31-Dec-04 4.75
31-Jan-05 4.75
28-Feb-05 4.75
31-Mar-05 4.75
30-Apr-05 4.75
31-May-05 4.75
30-Jun-05 4.75
31-Jul-05 4.75
31-Aug-05 4.53
30-Sep-05 4.5
31-Oct-05 4.5
30-Nov-05 4.5
31-Dec-05 4.5
31-Jan-06 4.5
28-Feb-06 4.5
31-Mar-06 4.5
30-Apr-06 4.5
31-May-06 4.5
30-Jun-06 4.5
31-Jul-06 4.5
31-Aug-06 4.73
30-Sep-06 4.75
31-Oct-06 4.75
30-Nov-06 4.93
31-Dec-06 5
31-Jan-07 5.17
28-Feb-07 5.25
31-Mar-07 5.25
30-Apr-07 5.25
31-May-07 5.43
30-Jun-07 5.5
31-Jul-07 5.72
31-Aug-07 5.75
30-Sep-07 5.75
31-Oct-07 5.75
30-Nov-07 5.75
31-Dec-07 5.54
31-Jan-08 5.5
29-Feb-08 5.3
31-Mar-08 5.25
30-Apr-08 5.08
31-May-08 5
30-Jun-08 5
31-Jul-08 5
31-Aug-08 5
30-Sep-08 5
31-Oct-08 4.61
30-Nov-08 3.23
31-Dec-08 2.14
31-Jan-09 1.6
28-Feb-09 1.08
31-Mar-09 0.57
30-Apr-09 0.5
31-May-09 0.5
30-Jun-09 0.5
31-Jul-09 0.5
31-Aug-09 0.5
30-Sep-09 0.5
31-Oct-09 0.5
30-Nov-09 0.5
31-Dec-09 0.5
31-Jan-10 0.5
28-Feb-10 0.5
31-Mar-10 0.5
30-Apr-10 0.5
31-May-10 0.5
30-Jun-10 0.5
31-Jul-10 0.5
31-Aug-10 0.5
30-Sep-10 0.5
31-Oct-10 0.5
30-Nov-10 0.5
31-Dec-10 0.5
31-Jan-11 0.5
28-Feb-11 0.5

 

[Uncle Spielberg]

Oh how I have missed NSC !. No your right Darren/Simeon as you ALWAYS are. I shall now crawl back into my pit.

 

[Triggaaar]

With inflation at 4% , BBR should be around 6% at the moment.

Why should BBR be 2% above inflation?

BBR has averaged just under 9% over the last 20 years

Where is that 9% from? The official Bank Rate for the last 20 years has been:

31-Dec-91 11.56
31-Dec-92 9.42
31-Dec-93 5.88
31-Dec-94 5.34
31-Dec-95 6.57
31-Dec-96 5.88
31-Dec-97 6.55
31-Dec-98 7.23
31-Dec-99 5.34
31-Dec-00 5.97
31-Dec-01 5.12
31-Dec-02 4
31-Dec-03 3.69
31-Dec-04 4.39
31-Dec-05 4.65
31-Dec-06 4.64
31-Dec-07 5.51
31-Dec-08 4.68
31-Dec-09 0.64
31-Dec-10 0.5

an average of 5.38, with it basically falling all the time. It was even higher in the 80s.

0.5% is actually hugely damaging long term, to the economy, to savers, who outnumber borrowers, to pensioners and sends a message to the World's economies that ours is f*cked.

Our economy is in a mess, as unfortunately are many other economies around the world. We're not the only ones with low rates either, low rates were common across other leading economies before our rates dropped.

EDIT - was writing that while someone had already posted similar above

 

[Simster]

Oh how I have missed NSC !. No your right Darren/Simeon as you ALWAYS are. I shall now crawl back into my pit.

Be fair, all I'm doing is asking you to elaborate intelligently on your opinion. Instead of which, you are presenting a fairly outrageous opinion as fact and flouncing as soon as anyone disagrees with you.

 

[Uncle Spielberg]

BBR averaged 9% but to be fair that was from 1989-2009 so the record lows have dragged that down in the last 2 years. I have not calculated Darren's table but he may be right. BBR at 0.5% is damaging. That is my opinion and I have explained why. Savers, Pensioners etc. Also people getting used to pay nothing on their mortgage for a long period of time and adapting their lifestyles to spend the savings they have made are going to find it hard when the BBR and mortgage rates go back to anything like normal and the longer this goes on the longer people will become detached from the reality of what a reasonable rate of interest should be. There is already talk of " people will not be able to afford their mortgages if bank base rate goes up 1% ", well how on earth did the same people afford to pay them when the BBR was 5.75% in 2008 ?. Still what do I know ?.

 

[Uncle Spielberg]

Its been fun but my foray into NSC again has reinforced what I thought. Cheerio.

 

[beorhthelm]

0.5% bank rate is a panic measure. It is a last resort. With inflation at 4% , BBR should be around 6% at the moment. BBR has averaged just under 9% over the last 20 years and never in the 400 year history of the Bank of England interest rate has it been below 2% before 2009. Make of that what you will. 0.5% is actually hugely damaging long term, to the economy, to savers, who outnumber borrowers, to pensioners and sends a message to the World's economies that ours is f*cked.

what is they say about past performance...?

0.5% is an extreme and isnt healthy long term. rates will rise slightly soon due to inflation. however, as a tool against inflation, interest rates are highly restricted because pricing presure is coming from outside our economy. interest rate increases for the £ are not going to lower world wide demand for commodities. The best bet for fighting inflation is going to be fiscal policy, i expect to see an end to petrol excise increases, which fuel inflation.

 

[Triggaaar]

Also people getting used to pay nothing on their mortgage for a long period of time and adapting their lifestyles to spend the savings they have made are going to find it hard when the BBR and mortgage rates go back to anything like normal and the longer this goes on the longer people will become detached from the reality of what a reasonable rate of interest should be.

Obviously some people aren't sensible. And although the base rate is extremely low, actual new mortgage rates are only 1 % less than they were 10 years ago.

There is already talk of " people will not be able to afford their mortgages if bank base rate goes up 1% "

There will always be some people that can't afford it whatever the rate. There are some that can't affor it now. Without knowing how many can't afford it, that's just a headline for a tabloid.

Its been fun but my foray into NSC again has reinforced what I thought. Cheerio.

You've obviously been here a while, so I'm not sure why you needed to reinforce your opinion. With 30 thousand posts to your name, I assume you'll be back.

 

[Papak]

I rarely post on this forum but I must agree with Uncle Spielberg on this one.

"Easy" borrowing got us into the current ecomonic mess and maintaining low interest rates cannot turn things around in my opinion.

 

[Beach Hut]

High interest rates will kill a fragile economy as it prevents spending - madness if interest rates go up for the economy

 

[dingodan]

This:



and this: