|
|
Post by stuartassetzcapital on Mar 19, 2020 15:31:31 GMT
This is such a fast-moving situation, and as we expected interest rates have been dropped again to near zero. I doubt the committee has left the meeting room since the last time rates were slashed, and will now likely be debating when to take rates negative and by how much.
-1% looks very possible in the next month, and frankly this has been on the cards since last year. It was only a matter of time and the pandemic has meant that time is now.
This will decimate seriously impact savers' returns savings and if rates go negative then businesses and higher net-worth individuals could be hit by what is effectively a tax on their bank savings balance. To avoid this they many will seek to invest their money, accepting higher risk in return for yield. Our type of peer-to peer lending is one option, which also has the benefit of supporting the country's economy and smaller businesses. That's the point of negative rates.
Borrowers on variable rates will see lower borrowing costs and new loans have a chance of being cheaper. but in a heightened risk environment those borrowing costs would be lucky to stay where they are.
|
|
mrsb
Posts: 196
Likes: 102
|
Post by mrsb on Mar 19, 2020 15:45:50 GMT
Wishful thinking i think.
Any signs of your queue machine emerging into the light?
|
|
|
|
Post by stuartassetzcapital on Mar 19, 2020 15:48:34 GMT
Any hour now I hear
|
|
cb25
Posts: 3,528 
Likes: 2,668
|
Post by cb25 on Mar 19, 2020 15:49:53 GMT
Stuart, always nice to engage with you but it doesn't help having two threads on the same subject (the other one being here)
|
|
mrsb
Posts: 196
Likes: 102
|
Post by mrsb on Mar 19, 2020 15:50:34 GMT
Such precision - I'll set my alarm!
|
|
|
|
Post by stuartassetzcapital on Mar 19, 2020 15:58:02 GMT
Re inflation, no, whilst it is a real risk it will be monitored to death. instead the government money to be pumped into the economy will be at a discount to the 8.33% per month of GDP needed to hold everything together if everyone's turnover etc goes to zero. Instead they will discount that so there is no profit, no spare cash for people to spend to drive inflation when factories are shutting and shipping is stopping. If people's wages are being supported by the government then expect say 50% of previous wages to compensate for 1) nothing to spend money on, locked in house and no holidays or restaurants etc and 2) we do NOT want inflation in such crazy times as that is pouring fat on the fire.
|
|
|
|
Post by bracknellboy on Mar 19, 2020 16:18:10 GMT
I think inflation now will be a serious issue for britians if they keep this rate for a long period of time, God forbid go lower. Even if we get back to 0.25%; inflation is going to be a large issue, not just for savers, but it will impact everybody. Living wages will in no way keep up with this. Inflation  ? Really ? Back in the real world, unemployment is in danger of going through the roof, and demand is going through the floor as no one is able to operate normally in the economy. Now, I agree that SOME inflationary pressue will come from Sterling dropping through the floor. But then with wwide demand suppression, that will no doubt for a while be offset by lower prices for external goods (just look at the oil price right now). now, without wanting to make it a Brexit commentary, if Brexit goes full speed ahead while everyone's focus is on stopping the 4 horseman of the apocalypse then I grant you that inflation could climb thanks to tariffs, general cost of trade, and our biggest trading partner thinking actually they'd like to keep some "for the use of the EU only" blocks on critical items. Still, I think right now the picture is a tad more deflationary in outlook rather than inflationary.
|
|
|
|
Post by Harland Kearney on Mar 19, 2020 16:19:05 GMT
I think inflation now will be a serious issue for britians if they keep this rate for a long period of time, God forbid go lower. Even if we get back to 0.25%; inflation is going to be a large issue, not just for savers, but it will impact everybody. Living wages will in no way keep up with this. Inflation ? Really ? Back in the real world, unemployment is in danger of going through the roof, and demand is going through the floor as no one is able to operate normally in the economy. Now, I agree that SOME inflationary pressue will come from Sterling dropping through the floor. But then with wwide demand suppression, that will no doubt for a while be offset by lower prices for external goods (just look at the oil price right now). now, without wanting to make it a Brexit commentary, if Brexit goes full speed ahead while everyone's focus is on stopping the 4 horseman of the apocalypse then I grant you that inflation could climb thanks to tariffs, general cost of trade, and our biggest trading partner thinking actually they'd like to keep some "for the use of the EU only" blocks on critical items. Still, I think right now the picture is a tad more deflationary in outlook rather than inflationary. Note for a long period of time. In terms of years like Euro has seen, why are you ranting on about something entirely diffrent to my post and qouting me on it? Ofc this drop is needed, infact I would probs argue we will see more drops in order to save jobs. Something I'm entirely for if it meets that end.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Mar 19, 2020 16:22:16 GMT
I think inflation now will be a serious issue for britians if they keep this rate for a long period of time, God forbid go lower. Even if we get back to 0.25%; inflation is going to be a large issue, not just for savers, but it will impact everybody. Living wages will in no way keep up with this. Why would there be any inflation if demand is dropping to near zero?
|
|
Mikeme
Member of DD Central
Posts: 428
Likes: 331
|
Post by Mikeme on Mar 19, 2020 16:24:47 GMT
Thank you Stuart. Really interesting reading for us that are not so financially savvy. When you have time give all of us lenders more ideas of your thoughts and reasoning.
|
|
|
|
Post by Harland Kearney on Mar 19, 2020 16:25:10 GMT
Being that nobody is actually reading my post correctly, a long period of time = After the crisis/recession has ended (18 months?). Like we have seen in europe for nearly half a decade. Europe was paralysed to pull itself out of such low interest rates, I believe UK can plan it diffrently though, lets hope. Of course there will be no inflation now, I thought that went without pointing out  |
|
Mikeme
Member of DD Central
Posts: 428
Likes: 331
|
Post by Mikeme on Mar 19, 2020 16:29:46 GMT
I've been reading.  |
|
|
|
Post by Harland Kearney on Mar 19, 2020 16:31:37 GMT
Might we see a inflation in the amount of toilet paper in the stores? Its a nightmare finding any, my lord the panic  |
|
Mikeme
Member of DD Central
Posts: 428
Likes: 331
|
Post by Mikeme on Mar 19, 2020 16:37:43 GMT
Just use a flannel soap and hot water!! Or even a BUM GUN as used in mid east and Asia
See I am reading
|
|
mrsb
Posts: 196
Likes: 102
|
Post by mrsb on Mar 19, 2020 16:38:22 GMT
The polymer notes will be awkward to use (once they become lower in value than Cushelle etc)
|
|
? Really ? 
