Interest rate predictions

[diy_fun_uk]

Before I type anything else, let me say this I'm fully aware no one on here, probably no one anywhere, knows where interest rates are going to go over the coming years. So replies like 'how should I know???' wouldn't be in the spirit of this thread I'm simply interested to know what peoples views are on the following.

The bank rate hasn't risen above 1% since February 2009, so we've had well over a decade of (very) low rates. This has obviously started to change over the course of 2022 with the rate hitting 3% today. In the decade prior to the 2008 crash, rates hovered around 4-7% and latterly rarely went above 5%.

What, in your opinion, will happen to interest rates over the coming decade? Do you think we'll see them return to pre 2008 levels of anywhere between 3-7%, or do you think there's a risk of rates going above 10% as they did in the 1980s?

From what I can gather, most people in the know say the decade of low rates was never intended to last that long, it was a temp measure due to 2008 goings on. So based on this, surely the good times (not for savers right enough) have gone, at least for the foreseeable?

 

[motorbiking]

Interest rates have not been sustainable for the last 10-15 years. We cannot have savings being out performed by inflation at the level we currently have. Savers have been subsidising borrowing for at least 10 years.

I would say 5-6% is where it needs to be with inflation levelling back to 4-5%

 

[JohnD]

surely the good times (not for savers right enough) have gone, at least for the foreseeable?

When savers receive interest at below the rate of inflation, they are losing. This is not "good news"

Interest rates can reasonably be a couple of points above inflation.

Inflation is currently 10% or more.

You'll notice that the banks know this when they lend you money.

 

[Dork Lard]

My accountant is predicting a 6% base rate in spring 2023.

 

[SFK]

Hopefully 'only' a return to the Interest rates of around 5% that were typiclal (and normal) thoughout 2000's.

Bank Rate history and data | Bank of England Database

www.bankofengland.co.uk

Rather not get back to the 1990's.

 

[Ihavenojob]

I remember 10 to 15% mortgage rates, though 15% was short lived, my mortgage was never below 6%.

 

[Stivino]

Having worked all my days, I’m now mortgage and debt free so, it will be good to get something from the bank as a thank you from them, for letting them look after my money.

 

[ajohn]

BofE now seems to think mid 4's with some buts that could mean higher will be needed especially for a while

	2022 Q4	2023 Q4	2024 Q4	2025 Q4
GDP (c)	0.2 (0.1)	-1.9 (-1.2)	-0.1 (0.1)	0.7
CPI inflation (d)	10.9 (13.1)	5.2 (5.5)	1.4 (1.4)	0.0
LFS unemployment rate	3.7 (3.7)	4.9 (4.7)	5.9 (5.7)	6.4
Excess supply/Excess demand (e)	¾ (-¼)	-2½ (-2½)	-3 (-3¼)	-3
Bank Rate (f)	3.0 (2.4)	5.2 (2.9)	4.7 (2.4)	4.4

https://www.bankofengland.co.uk/monetary-policy-report/2022/november-2022

Rather not get back to the 1990's.

I'm not convinced those caused all that much of a problem for a lot of people really. Now though ................ Pass

 

[Harry Bloomfield]

My best is 2.5% interest from my accounts, I can get upto 5%, but only if I want to take the risk of tying money up long term, and taking the risk of more flexible rates rising above that 5%.

Heads you loose, tails you loose with money in the banks. Much better in flexible bonds

 

[gas112]

nationwide rates are 3.5% putting it away for a year or 4% for 2 years

 

[Odds]

 

[noseall]

Having worked all my days, I’m now mortgage and debt free so, it will be good to get something from the bank as a thank you from them, for letting them look after my money.

Hear, hear!

Ditto to the above.

 

[Bouy]

Having worked all my days, I’m now mortgage and debt free so, it will be good to get something from the bank as a thank you from them, for letting them look after my money.

Whatever you get back it will be less than inflation so expect to see your monies to recede in real buying terms as it has since time and banks began.

 

[Stivino]

Whatever you get back it will be less than inflation so expect to see your monies to recede in real buying terms as it has since time and banks began.

That's always been the case. But at least if I'm getting 4% ish, I feel as if I'm getting something compared the the 0.2% I had been getting.

 

[JohnD]

That's always been the case. But at least if I'm getting 4% ish, I feel as if I'm getting something compared the the 0.2% I had been getting.

Inflation at 10% and interest at 4% means you are losing 6% of value.