Bank of England raises interest rates to 5.5%

Indeed Nexus....I am a single bloke at the min, who works as an SA. I've got absolutely no chance at all. When I was with my ex girlfriend we spoke about buying a house and it would have been very hard. This was in Basingstoke, where prices are a bit less (not much though) than most of London. I'm still holding out for a Lottery win or Chris Tarrant asking me some easy questions on the telly.......................

I live next to a two up two down mid terrace house on the outskirts of North East London. It's for sale. For this ex council dwelling, which has had the front bedroom divided into two small box rooms - the greedy vendors want £235k!!!! - At least £50k over valued. How the hell can any first time buyer afford that !? Without first time buyers the whole property market is going to crash. It's inevitable............

This is it......

Prepares to rob the Bank of England!!!
Great o great the Bank of England says right lets put the rates up again, but have wages increased? Nope... This is why the interest rates need to be put back into the hands of the goverment!

Has anyone got a One Account? Having tried out their Mortgage Shrinker, the results are looking very good. Seems too good to be true, though. I'm going to look into it in more detail.

Our mortgage deal was a fixed 10 year rate of 5.49%.

Repayments of just under £700.

We've gone for an Off-set mortgage which is the same as the One account.

Art, nothing personal addressed to you - you just inspired my contribution below by your comment #6 above: ;D

I asked why inflation is going up, and was given a five page diatribe about general costs rising too, like production of materials such as cars, etc, plus energy... Apparently there is this General Shopping basket which this BoE sets its interest rates, and any increases on... cars and Digital TV's are in this general shopping basket. I have neither...

I'd respectfully suggest the MAIN index any government is concerned about is that which involves the annual increases in the Social Benefits and Pensions etc. Hence the traditional "cost of living" "basket of consumer purchases" gets fiddled restated to suit the Chancellor's very private forecasts and expectations.

We, in the UK, have an extremely high rate of unsecured and second mortgage borrowing, that broadly have been incurred to support a fairly high level of standard of living and everyday expenditure over the last several years now.

Most serious independent financial "experts" consider this a Bad Thing, as it depends largely on low interest rates to exist.

As to any discussion over "political" control of interest rates, consider it would be easy for the Government to restore - say - credit card repayments to be - say - 5% of the outstanding balance, minimum per month. Also, say, for 1/3 of the total purchase price to be paid as the deposit up front on ANY credit loan agreement.

Those of you who had family commitments in the 1970's onwards will remember what I am referring to.

HOW WOULD THAT AFFECT MOST OF US NOW, IF RE-INTRODUCED NEXT MONTH?

The UK Economy is well overdue for a slump which will be bloody and very painful. Property prices in the range where there is greatest demand - "first homes" etc. will be particularly affected as opposed to the luxury homes the more well off probably already own in their late 40's etc., with kids leaving home. And, of course, the millionaire properties attracted by London from international 2nd/3rd/4th home owners for both business and tax reasons.

WHAT is really affecting the poorer folks and families these days is not so much food. One can eat fairly well and healthily on a comparatively small weekly sum. Where low income families and the non-inner city people tend to feel the pain is in transport and Utilities costs - Electricity, heat light, gas, ditto, and Oil if one is out in the country. Plus, running a car for ANY sort of social life (even shopping) is a necessity.

IMHO, the worst off are the parents of young families where there is so much Consumerism and Advertising and Peer Comparison to have what are real luxuries - like "cool" trainers, clothing, electronic games, etc. etc., that Please Forgive my further IMHO DO NOTHING TO BRING UP KIDS WELL from the social skills, communication and "friendship" aspects.

Rather, encourages the kids to demand more to fit in with local "gang" culture? Because there is nothing else for them to do than be "nerds" tied to their computer in their bedrooms, or go out and roam the streets congregating near the local shop selling booze?

Is that what is being "cool" means?

Younger members here reading my post will have no sympathy with my recollecting it took several years to afford to carpet my house in the early 1970's, and my first washing machine was ex-parents-upgrade.

Older members here might agree that one did not assume one's first dwelling did not include a luxury fitted kitchen, fitted carpets and all modern domestic white-goods gadgets.

Whilst "Us" parents of the current two generations of say 25 yr old+ and 10 yr old + want the best for our "kids", and BETTER THAN WE HAD, the problem with achieving that in real life is in larger populations and greater competitiveness over the true "Value Added Jobs" available.

Since Thatcher days, the UK has tended to concentrate more (Unfortunately, IMHO) in "Service Industries" rather than basic production and manufacturing. That, I'd agree, was our National Loss, but it has been continued and extended under New Labour.

Because of our current "Global Village Economy", revaluation of international currencies is now very much on the cards. One of the principle reasons the UK should correctly have NOT adopted the Euro in view of all the recent new entry countries into the EU whose economies are wholly incomparable with existing EU Members including the UK.

Some global realignment is both necessary and inevitable.
Don't know when, Don't know where, Don't know how.

Since New Labour, our "balance of payments deficit" (as it usually was) has been almost unpublicised. Yet it is arguably the current most important statistics in world banking. Contrast the weakness of the globally traded US Dollar compared with, say, China's net export hard currency surplus.


BUT it is certain that the high level of credit card, HP, and second mortgages borrowings by us UK Citizens may well be seriously affected when it does happen.


And, to close, I bring this all back on Thread to DD's forum that the demand for new homes for our increasing UK native population (let alone catering for immigration under opening our borders in accordance with EU Membership) really must depend on "new" towns being set up and further erosion of our countryside.

This is best controlled by the Government to ensure social facilities and rail and road access are provided as well as the housing.

We all know "new" residential developments privately funded where no schools, shops, village community centres, doctors etc., facilities are provided or get overlooked....

And equally, we all know that whilst our governments work on 4 or so year cycles to try to please most of the people most of the time to ensure their re-election, THERE CAN BE NO SERIOUS ATTEMPT TO RESOLVE OUR EXISTING LONGER-TERM SOCIAL PROBLEMS, LET ALONE THE CURRENT ONES WE ARE NOW FACING.

We need to HOME our citizens.
We need to FEED our citizens.
We need to provide our citizens with HEAT, LIGHT and FUEL.
We need to ensure our citizens can live safely in PEACE.

Put broadly, these four factors are all that separate us from so called "third-world or developing" countries.

Because those are essentials of Life, and until we get them right, everything else such as education, an N.H.S. etc. etc. are "luxuries".

If global village influences on the UK zapped up interest rates to 9% tomorrow, and petrol went up to £7 per gallon, how would YOU cope and look after your family?

You want a multicultural and global village society? Then be prepared, if necessary, to live under what it imposes on you.


I guess most of us here rely on the main UK Supermarkets for food etc. They carry very low stocks if a "run" should develop.
Meanwhile, comparatively local farmers and food producers, not to mention local traditional village shops and Post Offices etc., are closing every day.

There are so many implications over the "publicly-speculated" Interest Rates. In Real Small Business Life, interest rates form a tiny percentage of overheads except when in comes to necessary capital investment to fund assets for the Long-Term survival of the business.

Cheers, all,
OngarParkNRide

Well, we had inflation running at 16% in the 70's apaprently, so my mummy tells me! If indeed Interest on Mortgages jumped to 9%, that would add around £120 a month to my mortgage, I'd hate to think what it would be for someone on a £120,000 mortgage.

I just think that the Governor of the BoE needs to understand what interest rate increases actually mean for people. yeah, it's all well and good saying that inflation is above target [3.4% currently] but we need to know exactly WHY inflation is above the target of 2%, not be palmed off with a five page diatribe about a general shopping basket full of things not many people have... Yeah, there might be 30 million cars on the road and 60% of the nation might have a digital TV, I have neither. Yeah, I do have a TV, it is 7 years old and still works perfectly well... I'm not bothered about picture quality. I am certainly not forking out £600 for a TV, my £159 model is perfectly OK. It does the job it was designed to do.

In fact, production costs for most products we use, appear to have DEcreased, but the companyies do not reduce the buying costs by the same proportion...

Its the same as a 20% off card, that gives me a discount in the shops on railway stations. A Cheese pasty BEFORE the discount scheme was started was £1.29, price after was £1.65, a 36p increase, translated as rather much more than 20%. I know that ploy a mile off.

I guess so... from your explanation, I now see the bigger picture, explained rather more clearer than the attempt made by the BoE in their diatribes!

Thank you sir TTran!

I'm pretty pleased about these rises. Savings are going up and my parents have no mortgage or debt!

But be assured Threadneedle Street wouldn't put them up unless it was vital.