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Bank eyes rate cut and £50bn cash injection to boost economy

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    Bank eyes rate cut and £50bn cash injection to boost economy

    Morning chaps

    Hope you all had a good bank holiday. The potential rate cut will be good news if your mortgage is on a tracker at the moment as long as your product doesn't have a collar.

    The Bank of England is preparing to inject £50bn into the economy to provide a growth boost, and is also contemplating cutting interest rates, amid fears of a global slump.

    inShare.1According to a report in the Sunday Times, economists are now pricing in £50bn of quantitative easing this week, while there is mounting speculation that the record low interest rate of 0.5% could be cut to 0.25%.

    The clamour for a rate cut has been growing in some quarters after the latest wave of bad news from Europe and the US, where data is declining sharply.

    The US unemployment rate unexpectedly climbed last week, rising to 8.2%, while in Europe the eurozone crisis is far from resolved, with German bond yields tumbling to new record lows last week as Spain's hit record highs.

    In the UK, where the economy is already officially back in recession, the picture is also bleak.

    On Friday, the latest PMI survey for the manufacturing sector - an area the government had hoped would lead the country out of recession - showed one of the largest falls in activity for 20 years, hitting a three-year low.

    While a rate cut has been backed in some quarters, other economists have questioned how effective it would be, warning it will impact banks' balance sheets further at a time when they are still weak.

    #2
    This thread needs girls

    And what exactly is wrong with an "ad hominem" argument? Dodgy Agent, 16-5-2014

    Comment


      #3
      The problems in the Euro zone have kept money in Sterling, so there had been no real side effect of the quantitative easing.

      When China opens its currency for trading, Sterling could crash, big time.

      I'm out!
      Fiscal nomad it's legal.

      Comment


        #4
        Seriously though, even though without the collar what difference would another 0.25% cut make to mortgage payments after all the previous cuts?
        Originally posted by Stevie Wonder Boy
        I can't see any way to do it can you please advise?

        I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

        Comment


          #5
          I guess it helps keep the Housing market afloat, which is what is driving this. Housing crash and we're Spain, but without the sunshine and sangria.

          If house prices 'normalised', we'd have a whole world of bankrupticies at the front door, as I can't see how we could survive a 50% devaluation, a la Spain, a la Ireland.

          It's the Elephant in the corner. In France, prices haven't crashed, per se, but have slowly fell, and I think there's more to come.

          I think this white water ride hasn't actually started yet.

          Comment


            #6
            Originally posted by Old Hack View Post
            I guess it helps keep the Housing market afloat, which is what is driving this. Housing crash and we're Spain, but without the sunshine and sangria.

            If house prices 'normalised', we'd have a whole world of bankrupticies at the front door, as I can't see how we could survive a 50% devaluation, a la Spain, a la Ireland.

            It's the Elephant in the corner. In France, prices haven't crashed, per se, but have slowly fell, and I think there's more to come.

            I think this white water ride hasn't actually started yet.
            +1
            Fiscal nomad it's legal.

            Comment


              #7
              Didn't house prices in Sydney drop 50% after the Olympics?

              Comment


                #8
                Originally posted by SimonMac View Post
                Seriously though, even though without the collar what difference would another 0.25% cut make to mortgage payments after all the previous cuts?
                It depends if banks decide to reduce the margins on tracker rates to help new borrowers to stimulate the housing market. For existing borrowers, it provides the opportunity to pay their existing mortgage down more quickly by making overpayments above and beyond their normal payment.

                Comment


                  #9
                  Originally posted by Martin@AS Financial View Post
                  It depends if banks decide to reduce the margins on tracker rates to help new borrowers to stimulate the housing market. For existing borrowers, it provides the opportunity to pay their existing mortgage down more quickly by making overpayments above and beyond their normal payment.
                  If only the banks had not given so many interest only loans
                  Fiscal nomad it's legal.

                  Comment


                    #10
                    Originally posted by Mich the Tester View Post
                    This thread needs girls

                    +1

                    one day at a time

                    Comment

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