Re: ummm

I don't think that is true. Interest rates are governed by inflation not house prices. If inflation gets out of the central bank's preferred range then interest rates are used to control it. If inflation is high interest rates are raised to slow economic activity down and lowered to increase activity.

In Australia Reserve Bank rates are about 2.5% but if house prices were the deciding factor would be much higher however rates remain at record lows because of continuing low inflation (less than 3%) and the need to stimulate economic growth which is only running at about 3% down from 5% (those figures might not be exactly right but are near enough)

The problem at the moment is that in some parts of the world interest rates are at or near zero so there are no economic levers left so central banks have to print money to encourage inflation which is the tail wagging the dog.

Re: ummm

Old Git - I'm with you all the way. My life used to be nothing but work. When we finally downsized and I sorted through all the paperwork I'd kept for years and years, I found papers showing a mortgage we once had with Household Mortgage Corporation at a rate of 17.5%!!
Now I've got 5 year accounts at 5% coming to an end and no decent rates for new accounts.
Not only all that......BUT....after working over 40 years AND topping up my NI contributions, "THEY" have reduced the number of years contributions needed AND delayed my state pension by 3.75 years............a total of around £25,000. If ever I get the chance to claim a benefit or scrounge something, I'll do the same as everyone else and go for it!
GGRRRRrrrr

Re: ummm

Inflation has fluctuated over the past five years, but base rates have remained constant, that's what's good about our capitalism, it requires us to spend, either keep rates low and disposable income up (after mortgage payment), or drop cash from the sky.

Re: ummm

Many have nothing left after mortgage payments though, here back in the 60's and 70s you could buy a house for 3 times your salary, now it takes well over 10 times for an average wage earner and forget it if you earn less than £30,000 !

Rents equal 40 hours at NMW rate work too so when people moan about interest rates I can't help think they must have had it easier than this generation who cannot even house themselves let alone save for later life.

Re: ummm

Lindylou my sister is in a similar situation as you regarding state pension and I feel outraged at the unfairness of it. I could maybe swallow this if they had aimed it at people who had only worked fifteen years say but to work 40 years and have this happen is an absolute insult.

Re: ummm

To add insult to injury, I have close relatives a few years older than me, who went abroad about 40 years ago after working in the UK for only very few years. They were offered the chance to top up their NI contributions - I understand only about £200 - and now claim full state pension! What a kick in the teeth that is!

Re: ummm

Perhaps best not to look at what others have or don't and try to make the most of what we have, because if I look a what some people have and are moaning about it (not here) I could get very angry. The idea I worked hard therefore I deserve really grates on those who also work hard and get very little.

Rules change governments change them, nothing we can do about it. The idea the extended my husbands working life I found most unfair, he is struggling now but no point moaning or looking at others as having more, just head down and get on with it. It is what it is.

Only thing I will comment on is if people with savings want more, because some of us haven't had those chances and need rates to stay low to be able to actually live on what we can earn.

I look at the kids today they don't stand a chance because older people are sitting on huge piles of cash (their homes) and don't want the house prices to fall even though many have not paid that much for their homes and have just accepted the rising prices as their due.

Re: ummm

It matters little to a house owner what the actual value of their home is because it will cost the same to buy another so fluctuating house prices are not a concern. A house is not a pile of cash until they die and their children benefit from it.

The people it really does concern is those with a mortgage who don't want house prices to drop and certainly not below the value of their mortgage. Once it is paid off who cares?

Re: ummm

I can tell you it is not £200 or even close. I worked in the UK for about 10 years but need 11 years to get the minimum pension I could top it up at the cost of several thousand dollars. I decided it wasn't worth it for a small amount of pension each year you so you are benefiting from my 10 years NI contributions with no benefit to me. So just be grateful.

Re: ummm

This is exactly the point I was making - the bank rate in the UK is 0.5% there is nothing left for the central bank to do to, lowering the rate will have no effect on boosting economic activity; the bank rate as an economic lever is broken. The next move will be up there is no where else to go.

Printing money is the only driver left to the Bank of England (which is what it is doing).

http://www.bankofengland.co.uk//publ.../2014/007.aspx