Our treasury management advisors dont forecast the rate changing (to 0.75) till at least Mar 2015 and that will probably slip too over that time. They predict 1.75 by Mar 2016.
Santander hate me! They keep trying to get me to pay my mortgage off - mine is 0.5% above base rate for the life of the mortgage (currently 7 years left on it).
Anybody know why the spread of mortgage rate to base is so high at the moment. I know that rates used to be higher, but I don't think there's ever been such a wide divergence between what you can get at the bank and what you pay in mortgage.
My personal view is the only way interest rates are going up in the next 5 years is if the inflation the government is unofficially encouraging (as its the only way the debt is ever going to get to a manageable level again) gets out of control and the old lady has to raise rates to curb it...if you want my guess, it could be 10 years or more before rates do go up again...but don't take a chance on either of those timeframes actually happening...
Anybody know why the spread of mortgage rate to base is so high at the moment. I know that rates used to be higher, but I don't think there's ever been such a wide divergence between what you can get at the bank and what you pay in mortgage.
Because the banks are greedy, grabbing b'stards who are using record low interest rates to borrow the cash themselves but maintaining (I think) a record difference between that rate and what their SVR is? Rates have gone down of course (so everyone thinks great!) but I think you are right in that the 'spread' has actually increased.
I agree with you LTGTR. Inflation is what the powers that be want. I cannot personally see any significant rise in Base Rate for 4-5 years. If Base Rate were put up by even 1%, there will be plenty of people in trouble. the Government know this and therefore will avoid any rate increase.
anbody know why, for example a lender can offer a 2.99% fixed rate to a new customer but can only offer a 3.99% rate to an existing customer?
obviously to attract business but how are they allowed to do it?
The first seven words of Bournemouth Addicks reply above yours is the answer to most question on this topic.
Not really. Unfortunately the Bank Of England has managed to make base rate almost meaningless. So, it has lost the only montary policy tool it had - setting the unproven quantative easing aside! No one with half of one single brain cell is going to be lending money to banks at or near base rate. Why would you when, for example, the average dividend yield on FTSE 100 shares at current levels is going to be around 3.4% this year? This historically unusual discrepancy may be one reason why stock markets have been doing so well recently. (For comparison when the FTSE was at its record back in 1999, just a little higher than it is now, dividend yield was 2% and base rate was more than double that at 5.75%.)
In addition Bank's are having to set aside more money to improve their capital ratios at the Govt. and FSA's behest. So they need a larger spread on their lending to compensate.
Buggered if I'd lend money to anyone at the sort of rates people seem to think is their god-given right to receive - would any of you? Historically the profits banks make are not out of line with the rest of industry. For example HSBC - arguably the UK's most profitable bank at the moment - makes much less money as a percentage of revenue than Apple. As for (yes, I agree they are excessive) bankers bonuses, why isn't everybody up in arms about bonuses paid in other industries? Apple - the greedy grabbing bastards - charge hugely excessive and massively profitable prices for its products while it paid a somewhat generous (even by bankers' standards) $378mn package to its CEO for 2011. Yet in that instance, the great unwashed seem quite happy just to bend over and take it.
The reason is because everybody has to use a bank, it next to impossible to survice without one these days. Add to that the fact we bailed the banks out and the recession is largely their fault and you can see why anti-bank sentiment is high.
Apple on the other-hand are a luxury brand. Nobody needs to give them money, and we haven't bailed them out with tax payers money. Add to the fact they are one of the richest companies in the world currently, so you'd assume that the bonus is performance related.
Banks on the other hand have performed terribly, but are still paying out bonuses. Every company I've ever worked for has only ever paid bonus when things have gone well. The term "rewarded for failure" has been bandied around in the press and it seems apt.
Historically the profits banks make are not out of line with the rest of industry. For example HSBC - arguably the UK's most profitable bank at the moment - makes much less money as a percentage of revenue than Apple. As for (yes, I agree they are excessive) bankers bonuses, why isn't everybody up in arms about bonuses paid in other industries? Apple - the greedy grabbing bastards - charge hugely excessive and massively profitable prices for its products while it paid a somewhat generous (even by bankers' standards) $378mn package to its CEO for 2011. Yet in that instance, the great unwashed seem quite happy just to bend over and take it.
I don't recall my taxes being used to bail out Apple when it went tits up due to its own greed though.
The reason is because everybody has to use a bank, it next to impossible to survice without one these days. Add to that the fact we bailed the banks out and the recession is largely their fault and you can see why anti-bank sentiment is high.
Apple on the other-hand are a luxury brand. Nobody needs to give them money, and we haven't bailed them out with tax payers money. Add to the fact they are one of the richest companies in the world currently, so you'd assume that the bonus is performance related.
Banks on the other hand have performed terribly, but are still paying out bonuses. Every company I've ever worked for has only ever paid bonus when things have gone well. The term "rewarded for failure" has been bandied around in the press and it seems apt.
I'm afraid it is merely convenient to blame a couple of bank failures for the perceived down-turn in the economy. It's much more complicated than that and both consumers (for over-borrowing) and the previous Government (also for over-borrowing) were partially culpable.
I entirely accept that a few banks, namely Bradford & Bingley, Northern Rock, HBOS (now part of Lloyds TSB) and RBS have needed bailing out. The first two did not pay mega bonuses to their staff, they were just woefully managed. So there were TWO banks - both Scottish - that meet your criteria for having pissed all over us, yet you tar the whole industry with the same brush. For the record there are, in round terms, 160 UK incorporated banks, 80 passported in EEA banks and 85 non-EEA banks authorised to accept deposits in the UK. Plus, of course, the Building Societies. So, if you don't like your bank and object to the wealth creators in their investment banking subsidiaries earning large bonuses, just move to another one. There's plenty to choose from and it's very , very easy: Co-op, Metro, Tesco, to name but a few. If you want a truly ethical bank (I don't) my suggestion would be The Islamic Bank Of Britain.
As far as interest rates are concerned, the Band Of England's yield curves (updated daily!) indicate that base rate might get back up to the dizzy heights of 2% in 5 years. Mind you, they have been so consistently wrong about inflation rates that it's probably fair to say that they don't know either!
anbody know why, for example a lender can offer a 2.99% fixed rate to a new customer but can only offer a 3.99% rate to an existing customer?
obviously to attract business but how are they allowed to do it?
The first seven words of Bournemouth Addicks reply above yours is the answer to most question on this topic.
In addition Bank's are having to set aside more money to improve their capital ratios at the Govt. and FSA's behest...
Yep this is true of course and no bad thing either given what happened to the banking system when the whole house of cards started tumbling.
Of course it would be easier to recapitilise when you are not having to set aside £b's to compensate those customers you have ripped off on PPI or those business who took out the banks equally dodgy interest rate swap deals...or pay the fines for rigging the Libor...or pay massive money laundering fines for dealing with decidely iffy geezers in South Americs or countries under financial sanction. We won't even mention the investigation into the assistance given to criminals to set up off shore accounts recently...
I suppose these scandals were all the fault of the punters too?
The reason is because everybody has to use a bank, it next to impossible to survice without one these days. Add to that the fact we bailed the banks out and the recession is largely their fault and you can see why anti-bank sentiment is high.
Apple on the other-hand are a luxury brand. Nobody needs to give them money, and we haven't bailed them out with tax payers money. Add to the fact they are one of the richest companies in the world currently, so you'd assume that the bonus is performance related.
Banks on the other hand have performed terribly, but are still paying out bonuses. Every company I've ever worked for has only ever paid bonus when things have gone well. The term "rewarded for failure" has been bandied around in the press and it seems apt.
I'm afraid it is merely convenient to blame a couple of bank failures for the perceived down-turn in the economy. It's much more complicated than that and both consumers (for over-borrowing) and the previous Government (also for over-borrowing) were partially culpable.
I entirely accept that a few banks, namely Bradford & Bingley, Northern Rock, HBOS (now part of Lloyds TSB) and RBS have needed bailing out. The first two did not pay mega bonuses to their staff, they were just woefully managed. So there were TWO banks - both Scottish - that meet your criteria for having pissed all over us, yet you tar the whole industry with the same brush. For the record there are, in round terms, 160 UK incorporated banks, 80 passported in EEA banks and 85 non-EEA banks authorised to accept deposits in the UK. Plus, of course, the Building Societies. So, if you don't like your bank and object to the wealth creators in their investment banking subsidiaries earning large bonuses, just move to another one. There's plenty to choose from and it's very , very easy: Co-op, Metro, Tesco, to name but a few. If you want a truly ethical bank (I don't) my suggestion would be The Islamic Bank Of Britain.
Top top post. All too easy to bank bash which has got sweet FA to do with the vast vast majority of retail banking staff on the high street who do their damnedest to provide a service with minimal numbers these days.
The reason is because everybody has to use a bank, it next to impossible to survice without one these days. Add to that the fact we bailed the banks out and the recession is largely their fault and you can see why anti-bank sentiment is high.
Apple on the other-hand are a luxury brand. Nobody needs to give them money, and we haven't bailed them out with tax payers money. Add to the fact they are one of the richest companies in the world currently, so you'd assume that the bonus is performance related.
Banks on the other hand have performed terribly, but are still paying out bonuses. Every company I've ever worked for has only ever paid bonus when things have gone well. The term "rewarded for failure" has been bandied around in the press and it seems apt.
I'm afraid it is merely convenient to blame a couple of bank failures for the perceived down-turn in the economy. It's much more complicated than that and both consumers (for over-borrowing) and the previous Government (also for over-borrowing) were partially culpable.
I entirely accept that a few banks, namely Bradford & Bingley, Northern Rock, HBOS (now part of Lloyds TSB) and RBS have needed bailing out. The first two did not pay mega bonuses to their staff, they were just woefully managed. So there were TWO banks - both Scottish - that meet your criteria for having pissed all over us, yet you tar the whole industry with the same brush. For the record there are, in round terms, 160 UK incorporated banks, 80 passported in EEA banks and 85 non-EEA banks authorised to accept deposits in the UK. Plus, of course, the Building Societies. So, if you don't like your bank and object to the wealth creators in their investment banking subsidiaries earning large bonuses, just move to another one. There's plenty to choose from and it's very , very easy: Co-op, Metro, Tesco, to name but a few. If you want a truly ethical bank (I don't) my suggestion would be The Islamic Bank Of Britain.
Top top post. All too easy to bank bash which has got sweet FA to do with the vast vast majority of retail banking staff on the high street who do their damnedest to provide a service with minimal numbers these days.
Slightly disingenuous to suggest that when people refer to 'greedy bankers' they are in any way talking about people working in high street branches taking home 18k a year. What they are clearly referring to are people trading for the bank 'earning' bonuses of millions of pounds.
Our treasury management advisors dont forecast the rate changing (to 0.75) till at least Mar 2015 and that will probably slip too over that time. They predict 1.75 by Mar 2016.
Comments
obviously to attract business but how are they allowed to do it?
No one with half of one single brain cell is going to be lending money to banks at or near base rate. Why would you when, for example, the average dividend yield on FTSE 100 shares at current levels is going to be around 3.4% this year? This historically unusual discrepancy may be one reason why stock markets have been doing so well recently. (For comparison when the FTSE was at its record back in 1999, just a little higher than it is now, dividend yield was 2% and base rate was more than double that at 5.75%.)
In addition Bank's are having to set aside more money to improve their capital ratios at the Govt. and FSA's behest. So they need a larger spread on their lending to compensate.
Buggered if I'd lend money to anyone at the sort of rates people seem to think is their god-given right to receive - would any of you? Historically the profits banks make are not out of line with the rest of industry. For example HSBC - arguably the UK's most profitable bank at the moment - makes much less money as a percentage of revenue than Apple. As for (yes, I agree they are excessive) bankers bonuses, why isn't everybody up in arms about bonuses paid in other industries? Apple - the greedy grabbing bastards - charge hugely excessive and massively profitable prices for its products while it paid a somewhat generous (even by bankers' standards) $378mn package to its CEO for 2011. Yet in that instance, the great unwashed seem quite happy just to bend over and take it.
Apple on the other-hand are a luxury brand. Nobody needs to give them money, and we haven't bailed them out with tax payers money. Add to the fact they are one of the richest companies in the world currently, so you'd assume that the bonus is performance related.
Banks on the other hand have performed terribly, but are still paying out bonuses. Every company I've ever worked for has only ever paid bonus when things have gone well. The term "rewarded for failure" has been bandied around in the press and it seems apt.
It's much more complicated than that and both consumers (for over-borrowing) and the previous Government (also for over-borrowing) were partially culpable.
I entirely accept that a few banks, namely Bradford & Bingley, Northern Rock, HBOS (now part of Lloyds TSB) and RBS have needed bailing out. The first two did not pay mega bonuses to their staff, they were just woefully managed. So there were TWO banks - both Scottish - that meet your criteria for having pissed all over us, yet you tar the whole industry with the same brush.
For the record there are, in round terms, 160 UK incorporated banks, 80 passported in EEA banks and 85 non-EEA banks authorised to accept deposits in the UK. Plus, of course, the Building Societies.
So, if you don't like your bank and object to the wealth creators in their investment banking subsidiaries earning large bonuses, just move to another one. There's plenty to choose from and it's very , very easy: Co-op, Metro, Tesco, to name but a few. If you want a truly ethical bank (I don't) my suggestion would be The Islamic Bank Of Britain.
Of course it would be easier to recapitilise when you are not having to set aside £b's to compensate those customers you have ripped off on PPI or those business who took out the banks equally dodgy interest rate swap deals...or pay the fines for rigging the Libor...or pay massive money laundering fines for dealing with decidely iffy geezers in South Americs or countries under financial sanction. We won't even mention the investigation into the assistance given to criminals to set up off shore accounts recently...
I suppose these scandals were all the fault of the punters too?