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User id CG3
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August 18th 2014
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Forum rating 45.54
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CARNEY CRITICIZED AGAIN BY PRESS
I read in the paper again today that Bank of England Governor Mark Carney is using interests rates as a political tool rather than an impartial instrument of financial policy.
It seems that interest rates will remain low until the election in May 2015 despite him issuing warnings that the rates will rise imminently. Why is he continually warning us of rate hikes and not doing it?
What is the purpose of the warnings if he is not going to put them up.
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User id RM1
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August 20th 2014
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For a long time I was expecting UK rates to rise and thinking everyone would be wise to fix their mortgages, then when we got all the warnings of the rate rises you mention coming in the press, my thoughts changed.
Here is why:
The financial meltdown of 2008 was largely a bank problem, so here we have to think at an angle.
Say you are the prime minister and you have to repay the collasal national debt but the banks arent making enough in tax revenue for you to start making any payments? What can you dream up to make the banks more profitable?
So for example the banks may borrow at 1.5% and lend at 3% making the difference, but if they can sell fixed rate mortgages at 4 or 5% and still borrow at 1.5% they will make a lot more profit. This in turn will increase tax revenues from their profits and give the government a chance to start reducing the national debt instead of continuing to borrow more.
I read the other day that 94% of all remortgages done in July 2014 were FIXED RATE mortgages! But no rate rise has been made. So the banks are laughing and as usual the public pays the bill.
If I am right about this idea then we can expect more warnings from the Bank of England of rate rises and not much in the way of actual rate rises.
Also one can ask this question: When was the last time they BOE was kind enough to warn us about a rate rise?
We are already highly taxed in the UK and we have many licenses, fees and other payments which are in reality nothing more than stealth taxes. For example, fishing license, landlord license, tv license etc etc
The government would lose popularity by adding more of these but are unlikely to be noticed by voters for whispering to the BOE to warn about rate rises.
As having a bunch of tracker mortgages is like having a short position in interest rates and then observing that the current trend has been down followed by sideways, if one is a trend follower as I am the correct action is to take no action.
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User id TT5
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October 6th 2014
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There is a Bank of England interest rate announcement due out at 12 noon on Thursday 9th October and I am expecting a 0.5% increase.
I respect your comments and the way you think differently to me, however I dont believe the press would keep warning us of it and not do it.
If it does not happen this time I will eat my shirt as its been too low for way too long.
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User id TC1
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April 7th 2015
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How did your shirt taste TT5?