The Bank of England is poised to cut interest rates by 0.25 points at the end of the Monetary Policy Committee meeting due to be held on Wednesday and Thursday of this week, according to a survey published over the weekend.
Following a study of 60 economists conducted by Reuters, the overwhelming response was that rates will be cut from 5.50 to 5.25 percentage points.
In contrast to last week's dramatic slashing of interest rates by the US Federal Reserve, the Bank of England is expected to favour smaller, incremental adjustments. Speaking to reporters for the Independent, Andrew Smith, Chief Economist at KPMG comments:
"A quarter-point rate cut on Thursday looks pretty much a done deal in the face of tightening credit conditions. Further rate cuts are on the cards – but not until more concrete evidence of a slowdown emerges."
However, while many are preparing to ease their belts a little at the prospect of a rate cut, Britain's biggest lenders have increased the cost of their tracker mortgages by up to 0.45 percentage points in the past fortnight alone – this means that new borrowers will get little or no benefit from the Bank of England's expected quarter-point cut in Bank rate.
Now hundreds of thousands of borrowers who remortgaged with the ubiquitous cheap tracker deals, which were popular two years ago, are facing hikes in their mortgage repayments of up to £75 a month.
According to figures from financial adviser John Charcol, raising trackers in this way will see banks and building societies cream off around £25 million. However, if the 0.25 point cut is made, the trackers will come down again – but only to the rate they were at before the cut.
The MPC has a difficult job at hand - after staving off a cut last month following the quarter point cut in December, pressure is on to see an improvement in conditions for homeowners, consumers and businesses alike.
Inflation from steepening energy and food prices, coupled with the depreciating pound, has to be balanced against fresh evidence of a weakening economy and the continuing effects of the credit crunch.
Learn more about tracker mortgages and compare deals
Monday, February 18, 2008
Hope for UK bank rate cut as Fed slashes interest rates by 50 basis points
The US Federal Reserve has cut interest rates by a further 50 points in a desperate bid to stave off a recession, just a week after its dramatic 75 point cut.
Initially the move to cut rates to three per cent triggered a boost in stocks before they settled down at closing, while the dollar fell to a record low against the Euro.
The cut follows on from last week's shock 75 point cut, which is the biggest easing of US monetary policy since the early 1980s and a move which aims to prove to critics that the Fed is one step ahead of the deteriorating economy.
The US financial markets have been struggling since the sub prime mortgages crisis of last year which has so far spread across most global economies and caused a widespread tightening of lending criteria.
However, economists have indicated that the Fed will consider cutting interest rates again, although the hope is that it will not have to before its next scheduled policy meeting in March.
In a written statement about their decision to further cut rates, the Federal Open Market Committee (FOMC) said: "Financial markets remain under considerable stress and credit has tightened further for some businesses and households."
Commenting on the outlook for bond markets Richard Woolnough, Manager of the M&G Optimal Income Fund, said: "The Fed's decision to slash rates doesn't change my view that a US recession is a probability this year, nor will it prevent corporate profits from falling across the board. I think central banks worldwide will continue to react to the severe slowdown by continuing to cut interest rates aggressively, which is good news for government bonds and investment grade corporate bonds."
Across the pond, the UK is still expectantly waiting for the next decision on UK base interest rate cuts from the Monetary Policy Committee following a plunge in the number of new mortgages approved which hit its lowest level for eight years.
The latest Bank of England figures were weaker than expected and revealed that building societies and banks only approved 73,000 loans for house purchases in the month of December, down from 81,000 in November and 114,000 in June.
It is now hoped that the Monetary Policy Committee, with the newly reappointed Mervyn King continuing in his role of Governor of the Bank of England, will take the decision to cut interest rates in the forthcoming meeting to be held on 6 and 7 February.
© Fair Investment Company Ltd
* Delicious
* Digg
* reddit
* Facebook
* StumbleUpon
…other Banking Stories
* The grass could be even greener for expats with offshore savings accounts
* Savings accounts defy base rate and offer higher rates than last year
* Standard variable rates slashed in line with MPC base rate cut
* Northern Rock now part of the national debt
* Fair Investment sees pros and cons to Bank of England rate cut
* A third of consumers would rather switch utility companies than go paperless
* Virgin seems likely victor in race for Northern Rock
* More Brits are now saving as credit crunch fears hit home
* A third of consumers would rather switch utility companies than go to paperless billing
* Olivant pulls out of the running for Northern Rock
Initially the move to cut rates to three per cent triggered a boost in stocks before they settled down at closing, while the dollar fell to a record low against the Euro.
The cut follows on from last week's shock 75 point cut, which is the biggest easing of US monetary policy since the early 1980s and a move which aims to prove to critics that the Fed is one step ahead of the deteriorating economy.
The US financial markets have been struggling since the sub prime mortgages crisis of last year which has so far spread across most global economies and caused a widespread tightening of lending criteria.
However, economists have indicated that the Fed will consider cutting interest rates again, although the hope is that it will not have to before its next scheduled policy meeting in March.
In a written statement about their decision to further cut rates, the Federal Open Market Committee (FOMC) said: "Financial markets remain under considerable stress and credit has tightened further for some businesses and households."
Commenting on the outlook for bond markets Richard Woolnough, Manager of the M&G Optimal Income Fund, said: "The Fed's decision to slash rates doesn't change my view that a US recession is a probability this year, nor will it prevent corporate profits from falling across the board. I think central banks worldwide will continue to react to the severe slowdown by continuing to cut interest rates aggressively, which is good news for government bonds and investment grade corporate bonds."
Across the pond, the UK is still expectantly waiting for the next decision on UK base interest rate cuts from the Monetary Policy Committee following a plunge in the number of new mortgages approved which hit its lowest level for eight years.
The latest Bank of England figures were weaker than expected and revealed that building societies and banks only approved 73,000 loans for house purchases in the month of December, down from 81,000 in November and 114,000 in June.
It is now hoped that the Monetary Policy Committee, with the newly reappointed Mervyn King continuing in his role of Governor of the Bank of England, will take the decision to cut interest rates in the forthcoming meeting to be held on 6 and 7 February.
© Fair Investment Company Ltd
* Delicious
* Digg
* StumbleUpon
…other Banking Stories
* The grass could be even greener for expats with offshore savings accounts
* Savings accounts defy base rate and offer higher rates than last year
* Standard variable rates slashed in line with MPC base rate cut
* Northern Rock now part of the national debt
* Fair Investment sees pros and cons to Bank of England rate cut
* A third of consumers would rather switch utility companies than go paperless
* Virgin seems likely victor in race for Northern Rock
* More Brits are now saving as credit crunch fears hit home
* A third of consumers would rather switch utility companies than go to paperless billing
* Olivant pulls out of the running for Northern Rock
Unfair bank charges case continues into third week
The High Court test case into unfair bank charges today enters its third week.
The case, a legal battle between the Office of Fair Trading (OFT) and eight banking institutions, was originally intended to last around eight days, but it now looks more likely that it will go on until mid February due to the amount of material that needs to be considered by the court.
The case started on January 17th at the International Dispute Resolution Centre and has been brought about in order for a legal ruling to be made on the issue of unfair bank charges.
Back in April 2006, the OFT ruled that the fees being charged by banks to their customers for things like exceeding an overdraft limit or a bounced cheque - which in some cases were up to £40 - were unfair, and that although the banks were within their rights to charge, the amount should only be enough to cover limited administration costs.
The OFT said that it did not cost more than £30 to send out a letter advising a customer of a breech in their current account agreement, and as a result, thousands of customers began claiming back the 'unfair' bank charges that they had paid.
But the British Banking Association continued to argue that the fees were fair and just; it was then that the OFT decided to take the issue to court and get a firm ruling one way or the other.
The financial institutions involved in the case are Barclays, Abbey, Clydesdale, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide Building Society, and all eight maintain their stance that penalising customers as much as £38 on overdrawn accounts is completely within their right.
But there are now mixed opinions into whether an OFT victory would actually be beneficial to consumers; many financial experts are worried that banks would resort to reclaiming their lost profits by taking away free banking.
"If the banks lose the case it will almost certainly be the end to ‘free’ banking in the UK", warned Dale Lovell, Editor of FinanceDaily.co.uk, "because the banks will have to find alternative ways of earning money back from customers."
The case, a legal battle between the Office of Fair Trading (OFT) and eight banking institutions, was originally intended to last around eight days, but it now looks more likely that it will go on until mid February due to the amount of material that needs to be considered by the court.
The case started on January 17th at the International Dispute Resolution Centre and has been brought about in order for a legal ruling to be made on the issue of unfair bank charges.
Back in April 2006, the OFT ruled that the fees being charged by banks to their customers for things like exceeding an overdraft limit or a bounced cheque - which in some cases were up to £40 - were unfair, and that although the banks were within their rights to charge, the amount should only be enough to cover limited administration costs.
The OFT said that it did not cost more than £30 to send out a letter advising a customer of a breech in their current account agreement, and as a result, thousands of customers began claiming back the 'unfair' bank charges that they had paid.
But the British Banking Association continued to argue that the fees were fair and just; it was then that the OFT decided to take the issue to court and get a firm ruling one way or the other.
The financial institutions involved in the case are Barclays, Abbey, Clydesdale, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide Building Society, and all eight maintain their stance that penalising customers as much as £38 on overdrawn accounts is completely within their right.
But there are now mixed opinions into whether an OFT victory would actually be beneficial to consumers; many financial experts are worried that banks would resort to reclaiming their lost profits by taking away free banking.
"If the banks lose the case it will almost certainly be the end to ‘free’ banking in the UK", warned Dale Lovell, Editor of FinanceDaily.co.uk, "because the banks will have to find alternative ways of earning money back from customers."
Thursday, January 17, 2008
Bad Credit Loans
Loans are also provided to individuals having poor credit record. Initially the interest rates may seem higher, but as time passes, their credit score and financial credibility will get better if they adopt a proper financial plan with the repayment amounts being in affordable limits. But, be careful of not applying for loans which are incompatible with your financial capability.
The Internet is a good place for researching on bad credit loans. Find out about several lenders, their loan terms, processes and interest rates. Do not apply to several lenders in a short span of time as it may further damage our credit score. An independent loan broker can help you with this.
The various kinds of bad credit loans that are available these days are:
• Home loans.
• Auto loans.
• Credit cards.
• Personal loans.
Bad credit personal loans are of two types, secured and unsecured. Secured loans are provided to homeowners depending upon their debt load as well as credit score. Loan is provided on the house property. Unsecured loans are rather very risky on the lender's part. Hence, getting them is usually difficult. Nevertheless, specialized lenders called sub-prime lenders are available for helping with unsecured loans.
Technorati Profile
The Internet is a good place for researching on bad credit loans. Find out about several lenders, their loan terms, processes and interest rates. Do not apply to several lenders in a short span of time as it may further damage our credit score. An independent loan broker can help you with this.
The various kinds of bad credit loans that are available these days are:
• Home loans.
• Auto loans.
• Credit cards.
• Personal loans.
Bad credit personal loans are of two types, secured and unsecured. Secured loans are provided to homeowners depending upon their debt load as well as credit score. Loan is provided on the house property. Unsecured loans are rather very risky on the lender's part. Hence, getting them is usually difficult. Nevertheless, specialized lenders called sub-prime lenders are available for helping with unsecured loans.
Technorati Profile
Monday, December 10, 2007
Mortgage Interest Rates
To understand why mortgage rates change we need to know why do interest rates change and there is not one interest rate, but many interest rates!
| Prime rate: The rate offered to a bank’s best customers. | |
| Treasury bill rates: Treasury bills are short-term debt instruments used by the U.S. Government to finance their debt. Commonly called T-bills they come in denominations of 3 months, 6 months and 1 year. Each treasury bill has a corresponding interest rate (i.e. 3-month T-bill rate, 1-year T-bill rate). | |
| Treasury Notes: Intermediate-term debt instruments used by the U.S. Government to finance their debt. They come in denominations of 2 years, 5 years and 10 years. | |
| Treasury Bonds: Long debt instruments used by the U.S. Government to finance its debt. Treasury bonds come in 30-year denominations. | |
| Federal Funds Rate: Rates banks charge each other for overnight loans. | |
| Federal Discount Rate: Rate New York Fed charges to member banks. | |
| Libor: : London Interbank Offered Rates. Average London Eurodollar rates. | |
| 6-month CD rate: The average rate that you get when you invest in a 6-month CD. | |
| 11th District Cost of Funds: Rate determined by averaging a composite of other rates. | |
| Fannie Mae Backed Security rates: Fannie Mae, a quasi-government agency, pools large quantities of mortgages, creates securities with them, and sells them as Fannie Mae backed securities. The rates on these securities influence mortgage rates very strongly. | |
| Ginnie Mae-Backed Security rates: Ginnie Mae, a quasi-government agency, pools large quantities of mortgages, securitizes them and sells them as Ginnie Mae-backed securities. The rates on these securities affect mortgage rates on FHA and VA loans. |
Interest-rates move because of the laws of supply and demand. If the demand for credit (loans) increases, so do interest rates. This is because there are more people who want money, buyers, so people who are willing to lend it, sellers, can command a better price, i.e. higher interest rates.
Cheap Business Loans
Availing business loans at cheap rate is no less than conquering a forte, its one uphill struggle. When you will visit the loan market, you are bound to get perplexed by the offer and less understanding of the practical details of business loans. Bad Credit Unsecured Personal Loans is here to solve your financial problem. You just need to apply at our website and relax. Rest we will arrange cheap business loans, fitting your commercial needs.
Bad Credit Unsecured Personal Loans is committed to its borrowers to find out cheap business loans for them, no matter what their personal circumstances are. The loan deal arranged by us will provide you real value for you money. Whether you want to extend your existing business, or planning for new one; you will be requiring hefty sum. At this point of your requirements, we at Bad Credit Unsecured Personal Loans will feel proud by organising cheap business loans, so that you can carry out your new venture.
Our contacts with the top lenders nationwide, ensures our borrowers that they will avail business loans at cheap rate of interest. They will offer you exact loan deal that you are looking for. Bad Credit Unsecured Personal Loans is constantly working with the experts of business loans, to match your requirements with the term of loan for your convenience. Our representatives will are working for you round the clock and finding for you Unsecured Loans and cheap business loans according to your individual requirements.
For FREE and no obligation quotes apply now at our website. We will find numerous suitable quotes of cheap business loans for you. Even if you are a bad credit borrower, we have no hassles in arranging cheap business loans the way you need. Fill in our online application form at our website and enjoy our fuss free services.
Bad Credit Loans
Finding an instant bad credit loans has becomes easier with online facility. Bad Credit Loans extends this service to UK borrowers so they can get cash in least amount of time. Bad credit loans can provide cash for any sort of small emergency requirements and to find it is not big problem. Individual with any sort of financial background can apply for find Bad Credit Loans at our website.
Bad credit loans arranged at Cash Loans will be entirely through online process. To complete our online application form a few details will be required. Name, address, employment details, contact information is necessary to complete this form. At Bad Credit Loans, the online form is received right away upon submission. Our dedicated representatives then start working on your application to find out the instant loans that best suits your circumstances.
Bad credit loans are short term loans that are appropriate for cash requirement up to £1000. Loan term for instant online loans is around 14 days. At www.regal-finance.co.uk, there is the provision to extend the repayment date till the next paycheque. Approval of find instant loans takes few minutes. Within 24 hours, the cash will be deposited into your valid bank account. Our services are fast and hassle free.
Bad Cash Loans arranges unsecured loans for the borrowers with tainted credit history. So if you are bad credit borrowers feel free to apply for bad credit loans at our site. Cash is just a click away—apply now!
Bad credit loans arranged at Cash Loans will be entirely through online process. To complete our online application form a few details will be required. Name, address, employment details, contact information is necessary to complete this form. At Bad Credit Loans, the online form is received right away upon submission. Our dedicated representatives then start working on your application to find out the instant loans that best suits your circumstances.
Bad credit loans are short term loans that are appropriate for cash requirement up to £1000. Loan term for instant online loans is around 14 days. At www.regal-finance.co.uk, there is the provision to extend the repayment date till the next paycheque. Approval of find instant loans takes few minutes. Within 24 hours, the cash will be deposited into your valid bank account. Our services are fast and hassle free.
Bad Cash Loans arranges unsecured loans for the borrowers with tainted credit history. So if you are bad credit borrowers feel free to apply for bad credit loans at our site. Cash is just a click away—apply now!
Subscribe to:
Posts (Atom)
