The Dark Perspective

Giving you social commentry with a twist of comedy, reviews and downloads. Its commentry about the things that I come across in my life. We all take different journeys in life and this is my journey.

Monday, October 02, 2006

Interest Rates Gamble

This Thursday the bank of England will sit down and decide the interest rates once again based on some factors which will be revealed in their meeting minutes delivered two weeks later. I never considered myself a gambling man but increasing I find myself like most commentators trying to predict the outcome and hedging bets. The interest rates not only affects millions of us homeowners but also people with large savings and pensions. For us homeowners our mortgages will increase with rate rises whilst the housing market still continues it robust surge in prices. For savers its a higher interest rate for savings with rate rises but only if the banks pass the savings on to its customers. First time buyers are reducing steadily as they cannot get on the housing ladder and those on already on the housing ladder are finding it difficult to move. More and more people are struggling with debt problems and the papers are predicting the up to 1 million could join them if there a rate hike. On the other hand the housing market is surging and inflation due to higher tuition fees and to a less extent (due to recent price cuts) the price of oil is also higher than expected. So there is pressure for the bank of England to increase rates.
So as we sit back and hedge our bets as to what decision the bank of England will make we will slowly realise that the odds are not really in our favor and hedging both ways is our only hope.

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