Interest Rates

[LilKim]

It seems to be that increasing rates are not doing much to inflation. News has it that inflation has now rose to 3% which means it is very likely that the BOE will raise interest rates again next month. How much higher will they need to go? This may sound silly but could there ever be another recession.................or am I worrying too much :-)

[Ethel]

Interest rates have been infeasibly low for the last few years - they are bound to rise.

I fully expect rates to reach the 10-12% mark in the next two years, and keep at that level for 12 - 18 months at least.

But then again - I don't actually KNOW.

[LilKim]

Hi Ethel,

But then that would mean a recession would it not if rates hit 10-12%? People are struggling to pay their mortgages as it is. It's worrying not knowing what will happen in the months to come xx

[Ethel]

Very true. I remember a similar situation in the late 80s - and then interest rates shot up to 15%.

Businesses went bust, people lost their jobs, homes were repossessed....

[Pippa68]

I remember the 15% rate, Ethel ~ my mortgage payments went up �400 per month in almost as little months!