I1L2T3 Posted October 12, 2011 Share Posted October 12, 2011 Seems to be a new mantra for the coalition. He says this like it's a good thing. It's not a good thing at all. It's abnormal. An insult to the intelligence of the population. The only reason it is 'good' is because if the rates went up perhaps millions of mortgage holders who have ever-stretched themselves financially during the boom will struggle to meet mortgage payments. The overall economic effect of unleashing higher interest rates on these people would be catastrophic. Cameron is tapping into that fear. What the Tories and the BoE (with help from Labour before them) have delivered is not something positive an economic time bomb. 1. Low rates that don't even stimulate growth 2. Low rates causing inflationary pressures to build up 3. Low rates causing a big decrease in the value of pensions 4. Low rates discourage saving, which in turn impacts funds available for banks to lend 5. Low rates eroding the value of savings 6. Low interest rates keep the value of certain assets artificially high, best example - housing 7. Low interest rates causing our currency to be devalued (with QE chucked in for good measure) 8. Low interest rates cause investors to chase better returns in an evironment where such opportunities are limitied. This encourages the formation of asset bubbles. 9. Small and medium non-export orientated business are damaged. They often have to import materials etc... The weakened currency makes this expensive These low rates are not something to celebrate Link to comment Share on other sites More sharing options...
lesterman Posted October 12, 2011 Share Posted October 12, 2011 Seems to be a new mantra for the coalition. He says this like it's a good thing. It's not a good thing at all. It's abnormal. An insult to the intelligence of the population. The only reason it is 'good' is because if the rates went up perhaps millions of mortgage holders who have ever-stretched themselves financially during the boom will struggle to meet mortgage payments. The overall economic effect of unleashing higher interest rates on these people would be catastrophic. Cameron is tapping into that fear. What the Tories and the BoE (with help from Labour before them) have delivered is not something positive an economic time bomb. 1. Low rates that don't even stimulate growth 2. Low rates causing inflationary pressures to build up 3. Low rates causing a big decrease in the value of pensions 4. Low rates discourage saving, which in turn impacts funds available for banks to lend 5. Low rates eroding the value of savings 6. Low interest rates keep the value of certain assets artificially high, best example - housing 7. Low interest rates causing our currency to be devalued (with QE chucked in for good measure) 8. Low interest rates cause investors to chase better returns in an evironment where such opportunities are limitied. This encourages the formation of asset bubbles. 9. Small and medium non-export orientated business are damaged. They often have to import materials etc... The weakened currency makes this expensive These low rates are not something to celebrate I fear that we are in a situation where there are few options. We are in a true devil or deep blue sea scenario. I don't like Cameron just for the record. Link to comment Share on other sites More sharing options...
MrSmith Posted October 12, 2011 Share Posted October 12, 2011 Seems to be a new mantra for the coalition. He says this like it's a good thing. It's not a good thing at all. It's abnormal. An insult to the intelligence of the population. The only reason it is 'good' is because if the rates went up perhaps millions of mortgage holders who have ever-stretched themselves financially during the boom will struggle to meet mortgage payments. The overall economic effect of unleashing higher interest rates on these people would be catastrophic. Cameron is tapping into that fear. What the Tories and the BoE (with help from Labour before them) have delivered is not something positive an economic time bomb. 1. Low rates that don't even stimulate growth 2. Low rates causing inflationary pressures to build up 3. Low rates causing a big decrease in the value of pensions 4. Low rates discourage saving, which in turn impacts funds available for banks to lend 5. Low rates eroding the value of savings 6. Low interest rates keep the value of certain assets artificially high, best example - housing 7. Low interest rates causing our currency to be devalued (with QE chucked in for good measure) 8. Low interest rates cause investors to chase better returns in an evironment where such opportunities are limitied. This encourages the formation of asset bubbles. 9. Small and medium non-export orientated business are damaged. They often have to import materials etc... The weakened currency makes this expensive These low rates are not something to celebrate I agree:o:D Link to comment Share on other sites More sharing options...
lesterman Posted October 12, 2011 Share Posted October 12, 2011 It is projected that the pension of someone who is 55 years old now and paid into a pension since he was 20 will take a 70% drop in the spending power of his pension from what it was expected to be. So that , in todays terms, if he expected a pension of £300 per week, it will actually be worth £90 per week, if he works until he is 65. If he works longer it will virtually be wiped out. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 12, 2011 Author Share Posted October 12, 2011 I fear that we are in a situation where there are few options. We are in a true devil or deep blue sea scenario. I don't like Cameron just for the record. I know why they need to be kept low - no party is going to want to unleash the monster that would be higher rates. I just don't think the coalition should be trying to spin it as something positive. It's not positive. It's a complete disaster. Link to comment Share on other sites More sharing options...
lesterman Posted October 12, 2011 Share Posted October 12, 2011 I know why they need to be kept low - no party is going to want to unleash the monster that would be higher rates. I just don't think the coalition should be trying to spin it as something positive. It's not positive. It's a complete disaster. I agree. But is the other way any less a monster? Many would lose their homes without direct intervention which we cannot afford. I also agree that the government should be more honest as to why they are being kept low. Link to comment Share on other sites More sharing options...
praises Posted October 12, 2011 Share Posted October 12, 2011 I dread to think the state we'll be in, in a couple of years. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 12, 2011 Author Share Posted October 12, 2011 I agree. But is the other way any less a monster? Many would lose their homes without direct intervention which we cannot afford. There is the question of what will happen to those people. But there is also the question of why they are in that situation to begin with. Is it morally right for the rest of the economy to be damaged to prop up irresponsible borrowers? If we're honest they are the key reason why rates are supressed. Link to comment Share on other sites More sharing options...
ANGELFIRE1 Posted October 12, 2011 Share Posted October 12, 2011 Aye, it's time the banks lifted the % we savers get, at present we are getting buxxer all for our savings. It's just not right. Regards Angel. Link to comment Share on other sites More sharing options...
taxman Posted October 12, 2011 Share Posted October 12, 2011 Interest rates have been ultra low for years now, how the hell can the tories claim credit for it? At the same time inflation is high, growth is low, and unemployment is up. Link to comment Share on other sites More sharing options...
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