BoE cuts interest rate to 0.25%, £60bn of extra QE

Likelihood of negative interest rates?

Reply 2

CherishFreedom

6

Original post by BasicMistake

Likelihood of negative interest rates?

Negligible.

Reply 3

OP

Original post by BasicMistake

Likelihood of negative interest rates?

Highly doubt it. It's very much expected to drop to 0.25%. Pound has fallen but is picking up again against the dollar.

There may also be a quantitative easing announcement.

Reply 4

OP

Economists' expectations for interest rate announcement (source: Bloomberg):
90.4% think it will be 0.25
3.8% think it will stay at 0.5
3.8% think it will be 0.10
2% think it will be cut to 0

Reply 5

OP

The market has already priced in the high chance of a rate cut, as seen by the pound falling against the dollar. If the rate cut is as expected (0.25%) then perhaps there is a chance of the pound rallying up.

UPDATE: Pound is rallying up already, before the rates announcement.

(edited 7 years ago)

Reply 6

0.25%

Not sure what it will achieve but I don't see any other reasonable option

Reply 7

CherishFreedom

6

Confirmed by the Guardian - rate cut to 0.25%.

Reply 8

Fullofsurprises

If rates go negative, would mortgage lenders be forced in some cases to pay people to take their mortgages? :teehee:

Reply 9

Original post by Fullofsurprises

If rates go negative, would mortgage lenders be forced in some cases to pay people to take their mortgages? :teehee:

They haven't gone negative and even if they did the effects won't transfer to consumers. The banks aren't that stupid.

Reply 10

OP

Original post by Fullofsurprises

If rates go negative, would mortgage lenders be forced in some cases to pay people to take their mortgages? :teehee:

They have not gone negative. Rates have been cut to 0.25%

Reply 11

Fullofsurprises

Original post by Trapz99

They have not gone negative. Rates have been cut to 0.25%

I know. I was just thinking ahead. And wishfully. :teehee:

Reply 12

OP

£60bn of extra QE. This was not expected by most economists and by most traders.

Reply 13

OP

Original post by Fullofsurprises

I know. I was just thinking ahead. And wishfully. :teehee:

Well it wouldn't be a good thing anyway. Banks would probably not give out as many mortgages and people will find it difficult to secure a mortgage. And this only applies to tracker mortgages- most normal mortgages have an interest rate set by the bank itself, not by the BoE.

Reply 14

Fullofsurprises

Original post by Trapz99

Well it wouldn't be a good thing anyway. Banks would probably not give out as many mortgages and people will find it difficult to secure a mortgage. And this only applies to tracker mortgages- most normal mortgages have an interest rate set by the bank itself, not by the BoE.

Sure, they are all based on "Base Rate + such-and-such a percentage" - I was amusing myself thinking of a situation where the base rate hits -2% and we get products 'charging' a rate of -0.5% on the mortgage. Of course, in the real world, they will find a way round it. :sad:

Note that the B of E has not ruled out further cuts in rates this morning.

Reply 15

OP

Original post by Fullofsurprises

Sure, they are all based on "Base Rate + such-and-such a percentage" - I was amusing myself thinking of a situation where the base rate hits -2% and we get products 'charging' a rate of -0.5% on the mortgage. Of course, in the real world, they will find a way round it. :sad:

Note that the B of E has not ruled out further cuts in rates this morning.

Yeah that's true. They have said that a further rate cut this year (most probably to 0%) is likely.

Reply 16

username1177050

Excellent news for hard up ordinary citizens with mortgages and borrowing costs, bad for remainers hoarding their wealth hehe

Reply 17

OP

Original post by neal95

Excellent news for hard up ordinary citizens with mortgages and borrowing costs, bad for remainers hoarding their wealth hehe

Well it's not that great. Ordinary people have savings accounts too...
But there will probably be a slight net benefit to ordinary people, yes

Reply 18

OP

The Bank of England is the 55th central bank to ease interest rates this year.

Reply 19