Base rate drops tomorrow

[gov]

Invest the maximum you can ( £40k ) in premium bonds - unless you want to risk the stock market the best interest rate you can get for fixed rate bonds is barely 1% - after tomorrow you'll be hard pressed to get that so you might as well buy Premium Bonds - you can cash them in at any time and your chance s of winning are greatly increased albeit long odds.

I cashed mine in after only realising 0.5% return P/A. They significantly changed the prize structure when the interest rates hit their previous low, they may do that again.

Yup think they will have to look at prizes again if rates hit 0. I am maxed out and been quite lucky with a return of around 15% 8)

I have only £1100 in bonds but still managed a £500 win a few months ago - we have Fixed rate bond maturing in October for £40k and am really tempted just to put the lot in to Premium bonds as the best I can get for even a 2 year bond is just over 1% - a bit different from 8 years ago when I retired and invested in FRB paying 5% Have another bond which is okay for another year

Can't help but wonder if we had voted Remain would we be in such a position

 

[uuf361]

Yay, down 25bps = lower mortgages!

 

[mr wilks]

Can't help but wonder if we had voted Remain would we be in such a position

Tbf the drop was in the offing way before the Brexit vote happened , its been .50 for 6-7 yrs so not exactly rocking the country dropping another .25
By all accounts its highly doubtful even when they do rise that you will ever see more than 3 / 4% base rate which itself could take many many years
Whether its a good or bad thing ? Dunno but it suits me on a .35 above base rate tracker

 

[gov]

Tbf the drop was in the offing way before the Brexit vote happened , its been .50 for 6-7 yrs so not exactly rocking the country dropping another .25
By all accounts its highly doubtful even when they do rise that you will ever see more than 3 / 4% base rate which itself could take many many years
Whether its a good or bad thing ? Dunno but it suits me on a .35 above base rate tracker

Yes I understand why for mortgage payers this is a good thing - I am fortunate that I am not in that position and am not dependant on income generated from savings - I do feel for people who are struggling - I remember buying our first house in 1974 and having only £30 a month left over - ay lad we had it tough in those days - lived in sceptic tank and our dad used to thrash us with barbed wire every night etc

 

[PerryGunn]

If you have a mortgage and a reasonable amount of cash savings, it's well worth looking at moving over to an offset mortgage - it doesn't work for everyone as the interest rates are slightly higher than for non-offset mortgages but, with savings rates so low, it's worth doing the calcs and seeing if you'd be better off...

 

[SonnyA85]

It's swings and roundabouts. You win some you lose some.

Weaker pound means the UK is more attractive to other countries in terms of buying goods. So we should be exporting more than normal.

People cry either way it's a lose / lose situation. Interest rate drops people moan about their savings in the bank. Interest rate rises people moan about their loans.

Bank of England is going to be printing another £50 billion or so therefore wise to invest if you have money in the bank spare as that is basically de-valuing your money and the cost of everything else should increase as a result.

You might want to look at the below link

http://www.nationaldebtclocks.org/debtclock/unitedkingdom

It's a pretty grim future ahead and it's been caused by politicians not a referendum.

 

[mattwaltersz4m]

Tbf the drop was in the offing way before the Brexit vote happened , its been .50 for 6-7 yrs so not exactly rocking the country dropping another .25
By all accounts its highly doubtful even when they do rise that you will ever see more than 3 / 4% base rate which itself could take many many years
Whether its a good or bad thing ? Dunno but it suits me on a .35 above base rate tracker

The opposite in fact as rates were going to increase in the UK aligning with the US rise.

 

[Paulwirral]

Does .25 per cent drop make any real difference in the real world ? I won't be rushing out to buy anything on finance because of it , nor will I be getting that much less for money in the bank .
Anyone celebrating it should do the maths and make sure they can afford any debt they have at 4 per cent or even more , I , along with more than a few others have seen the rate way up there at 15 and over and can remember it only to well !

 

[gov]

- lived in sceptic tank and our dad used to thrash us with barbed wire every night etc

Sceptic tank - what's a sceptic tank ! I did of course mean septic tank

 

[jimmybell]

Does .25 per cent drop make any real difference in the real world ? I won't be rushing out to buy anything on finance because of it , nor will I be getting that much less for money in the bank .
Anyone celebrating it should do the maths and make sure they can afford any debt they have at 4 per cent or even more , I , along with more than a few others have seen the rate way up there at 15 and over and can remember it only to well !

Except now the rate will never go up there - because so many people are now heavily leveraged at low rates - so we can't afford to, it would bankrupt too many people, an entire generation (that's meant to be earning to prop up the older generation). Unless we have some dramatic economic turnaround we won't see 5% for at least 20 years.

If you're in the generation that has paid interest rates at 15% then you also saw high inflation. You also had houses that were actually 'affordable', rather than simply labelling the cheap end of an expensive market 'affordable' that we see today.

 

[Paulwirral]

Obviously your correct etc on all points , my point really is what difference does a quarter per cent cut make unless your a gazillion pound in debt or you have that much in the bank . im not going to be making any life changing decisions based on my new found quarter per cent wealth :lol:

 

[jimmybell]

No, but if you have a fixed salary, and a mortgage cost that is currently tracking that rate (or in future will adjust because of the new rate)... you have a few pounds (whether that be £1, or £100) in your bank you didn't have before. Unless you're super savvy, 99.99% of the popn will not notice it, so won't up their savings standing order by .25% of their mortgage interest amount.. thus it will filter into the economy, boosting spend, collecting more VAT and increasing cashflow. etcetc.

It's all bollocks, we should probably be trying to push it up as much as possible but such is the trend with current economic policy. We're essentially faking it.

 

[Paulwirral]

I'll definitely agree with your final statement , most sense I've read on the Internet for a long time

 

[mattwaltersz4m]

No, but if you have a fixed salary, and a mortgage cost that is currently tracking that rate (or in future will adjust because of the new rate)... you have a few pounds (whether that be £1, or £100) in your bank you didn't have before. Unless you're super savvy, 99.99% of the popn will not notice it, so won't up their savings standing order by .25% of their mortgage interest amount.. thus it will filter into the economy, boosting spend, collecting more VAT and increasing cashflow. etcetc.

It's all bollocks, we should probably be trying to push it up as much as possible but such is the trend with current economic policy. We're essentially faking it.

Imagine what that would do to everyone living the credit dream. You only have to look at this site to see everyone on pcp deals galore!

 

[mr wilks]

Tbf the drop was in the offing way before the Brexit vote happened , its been .50 for 6-7 yrs so not exactly rocking the country dropping another .25
By all accounts its highly doubtful even when they do rise that you will ever see more than 3 / 4% base rate which itself could take many many years
Whether its a good or bad thing ? Dunno but it suits me on a .35 above base rate tracker

The opposite in fact as rates were going to increase in the UK aligning with the US rise.

On a purely casual basis I follow the monthly meets with interest & hadn't expected any increase certainly this year & most likely the most of next :?
What has changed with the US - UK alignment to prompt the drop today ?

 

[jimmybell]

Brexit - house sales slump.

 

[mattwaltersz4m]

What has changed with the US - UK alignment to prompt the drop today ?

US got it wrong and shot its load too early by raising rates when they did. They keep putting back any further raises every month as things are far from rosy out there. Essentially as its a massive unknown the BOE today cut to protect ahead brexit. They want to keep people spending rather than saving.

 

[mr wilks]

What has changed with the US - UK alignment to prompt the drop today ?

They want to keep people spending rather than saving.

One so called "financial expert" suggested yesterday the drop was to push people into riskier investments in order to gain better returns ?
Can see the reasoning but not how this would be a prompt the rate drop or how it would drive the economy ?
Also read the drop was more towards stimulating business as they can access funds easier which in turn should drive the economy
Lets be honest here , its all a game of hit & hope played out by the supposed financial brains of the country who in reality know little more than many of us who have ran businesses , houses , families etc & had to make the figures add up as opposed to playing a game of chance :wink:

 

[Geezah]

[youtube]7PCkvCPvDXk[/youtube]

♫ I'm all about that bass ♫

Errrr, I think she was referring to her 'Bottom Line' :lol:

 

[Angelus666]

Anyone who's seen The Big Short must kind of feel that we are almost heading towards another 'correction' in the market. If the average salary is £23k and the average house price is 10 times that amount, then the basic math doesn't work. Attractive loans on a cheap rate deal are great as long as that rate doesn't go up.....can you imagine if the base rate went back to 3%...the whole system would melt down again. Anyone who's bought a house in the last 3 years would be in for a world of trouble!

Let's face it, there are a section of individuals who get very, very rich from the boom bust cycle (and they make the cycle happen).....I'm guessing they don't tend to drive Z4's.