Daily Archive: October 27, 2017

Oct
27

Why we don’t need an interest rate rise (yet)

The economy is weak and the impact of higher rates on consumer behaviour is arguable

It has been a grim week for economic news. High street stores reported rapidly falling sales – the worst since 2009. Output from Britain’s car factories tumbled, shrinking by 4.1% in September, with demand from UK car buyers plummeting by 14.2%. Meanwhile, official figures revealed the average pay for full-time workers crept up to £550 a week, but in real terms have fallen as they have been outstripped by prices. Even the one mildly positive bit of economic news – that GDP growth was slightly higher than expected – came with a warning that construction activity contracted for the second quarter in a row.

In normal times we might expect a chancellor to be finding ways to stimulate the economy, with the Bank of England loosening the purse strings to lift activity. But precisely the opposite is about to happen. We are told there is an 80% certainty that the governor of the Bank of England, Mark Carney, will make the momentous announcement on Thursday that UK interest rates are to rise for the first time in 10 years.

Maybe Mark Carney wants us to wake up and smell the coffee after years of bingeing on debt

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Oct
27

The looming interest rate rise: how it will affect you

On 2 November, the Bank of England is expected to increase the base rate after a decade. We explore what impact it will have on homeowners and savers

The longest period in living memory without a Bank of England rate rise is expected to end on Thursday, when the base rate is likely to increase by 0.25% to 0.5%. The percentage rise is small, but the worry for homebuyers with jumbo mortgages is that it could be the start of a number of increases that could make their loans unaffordable. However, for people with savings who have suffered near-invisible returns on their money, is this the light at the end of the tunnel?

This week’s GDP figures, showing a slightly better performance by the economy than anticipated, has made the likelihood of an interest rate rise on 2 November almost a slam dunk, according to City experts. About 80% of market watchers are saying an increase is inevitable, although there are voices calling for the Bank to maintain rates at their historic low.

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Oct
27

Billionaire boom is a sign that rates need to rise

Ultra-low interest rates and QE packages have caused social and political havoc

Oct
27

Trump: ‘People are anxiously awaiting’ Fed chair decision

Oct
27

Fed chair nomination coming next week: White House

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