Credit Crunch

[newtonfox]

US economic output falls sharply

here

 

[FIF]

I dunno, arseholes has a bit of a ring to it

 

[Durham Fox]

Base rate down again today by .5% to 1%

I suspect they'll bottle it and not go to 0%

 

[FIF]

hope not from the savers POV.

 

[Durham Fox]

I would think you can bank on savings rates coming down personally.

 

[drew]

Makes no difference imo, until the banks start lending again nothings going to change.

 

[FIF]

until the banks let people spend what they don't have and some never will, you mean

 

[drew]

It's one thing lending irresponsibly to all and sundry and another to lend to people who have the means to repay debt, i prefer the latter.

 

[FIF]

True but looking at recent history it doesn't seem that the banks agree with you.

 

[newtonfox]

Zavvi axes 17 more stores and 242 jobs

here

 

[highland fox]

here

Ford are getting rid of 850 people

 

[newtonfox]

Britain is in a "deep recession" that could get worse if efforts to save the banking system fail, Bank of England governor Mervyn King warned today.

During a press briefing on the Bank's latest quarterly inflation report, King said the "length and depth of the recession will depend to a significant extent on developments in the rest of the world, where a severe economic downturn has taken hold".

The economy is set to contract by as much as 4% in the first half of 2009, King said, admitting this was a sharper fall than most forecasts. Inflation is forecast to be 0.5% in two years' time, assuming interest rates are kept at their current 1%. This is significantly below the Bank's official inflation target of 2%.
"The prospects for economic growth and inflation remain unusually uncertain," King said. "Restoring both lending and confidence will not be easy and will take time."

Howard Archer, chief UK and European economist at IHS Global Insight, said the statement implied that interest rates would come down further. "We see them at a low of 0.25% and my initial reaction is I see nothing to change that view. It is increasingly likely that the Bank will take additional measures on top of the asset purchase programme. I expect it to keep the door open to quantitative easing."

King said that "bank rate doesn't have to go to zero, because we're getting to the point where it doesn't make a great deal of difference where it is."

King said: "We now will be moving to is a world in which we would be buying a range of assets, certainly including gilts, to ensure that the supply of money will grow at an adequate rate to keep inflation at the target so that normal economic growth can resume."

King's caution on the economic outlook for the UK came as data showed unemployment moved closer to the 2m mark in January.

Asked about the Bank's approach to the crisis, the governor admitted: "I'm not pretending that everything worked well. It clearly didn't... What we need to do is develop a new range of instruments."

from here

 

[Dickovforengland!]

Base rate cut to 0.5%. Good news for me because it means the balance on my tracker mortgage will go down more and when my fixed mortgage ends the SVR it moves onto will be the same or slightly less than the current 4.99% I have had for the past 5 years.

However I won't have more cash to spend in the shops until November this year when the bank review the balance on the mortgage and amend the payments to fit the remaining term on the mortgage.

I don't know how typical that is of tracker/variable mortgages. If it is typical, only those people who are on SVRs (8% or roughly 1 million people according to the BBC) AND whose lenders choose to pass on the cut benefit immediately.

So although I am happy, I can't see it will have significant impact on the UK economy apart from p1ssing off savers.

 

[Macky]

although I am happy, I can't see it will have significant impact on the UK economy apart from p1ssing off savers.

They're not bothered about pissing off savers, they don't want people to save, they want them to spend.
Rewarding people who borrow and spend will have an impact on the UK economy.

 

[fcukcov]

Base rate cut to 0.5%. Good news for me because it means the balance on my tracker mortgage will go down more and when my fixed mortgage ends the SVR it moves onto will be the same or slightly less than the current 4.99% I have had for the past 5 years.

However I won't have more cash to spend in the shops until November this year when the bank review the balance on the mortgage and amend the payments to fit the remaining term on the mortgage.

I don't know how typical that is of tracker/variable mortgages. If it is typical, only those people who are on SVRs (8% or roughly 1 million people according to the BBC) AND whose lenders choose to pass on the cut benefit immediately.

So although I am happy, I can't see it will have significant impact on the UK economy apart from p1ssing off savers.

When I go onto my variable repayment mortgage, this month. My rate will track 0.99% above base rate with no collar. It will take the bank 30 days to pass on the rate cut so effectively I will be one payment behind the rate cut.

 

[RHYDAL]

My rate is 0.7% above the base rate and my April payment will reflect the 0.5% drop. I'm almost getting embarrassed by how small my payments are now. My mate has an interest only tracker which is virtually free now. Doesn't make any sense.

 

[Cate Fox]

I'm on a fixed rate so none of this is any good to me... oh well...

 

[Brauny Blue]

I'm on a fixed rate so none of this is any good to me... oh well...

Just finished my 3yr fixed rate............happy days:icon_bigg

 

[City Fan]

Mervyn King (Not the Darts player) has announced that the BoE are pumping £75billion into the economy.

 

[Dour]

Probably about time I thought about a mortgage...