Interest rate rise predictions

[mcriot29]

When will rates rise by late 2016 is my prediction . when do you think dirt rates will fall or will they ever ?

 

[Taohua]

I doubted. the Euro zone inflation is only 0.7% in Oct. 2013, much lower than expected of 2%. The saving rate will be low in the furture several years to istimulate consumption. I am glad they didnt adjust the rate to minus.

UK might have a bigger chance to increase rate by the end of 2015.

 

[Lightning]

Regarding rates, there is speculation that the ECB will cut rates again. Draghi has said that the March meeting will be "important" and inflation remains well below target. It is anyone's guess as to when rates will increase again or if they will stay at low levels for many years to come.

I can't see any decrease in DIRT rates in the foreseeable future.

 

[daheff]

to be honest with you, I reckon they may raise rates sooner than drop them.

Lowering rates wont make any difference to spending now, so any reduction wont cause extra spending. similarily a small increase (looking at europe and not ireland) wouldnt reduce spending. But crucially, an increase in interest would increase baseline costs for businesses. An increase in costs would likely end up with higher prices for goods & services -giving the ECB their inflation increase that they are looking for.

 

[Lightning]

to be honest with you, I reckon they may raise rates sooner than drop them.

The majority, but not all, of Bloomberg / Reuters economists think there will be a March or April rate reduction.

Lowering rates wont make any difference to spending now, so any reduction wont cause extra spending.

Every little helps. A 0.15% reduction in rates will put a little more money in tracker mortgage holders pockets and will help lower Euribor which helps determine some business rates and ultimately business expansion.

 

[daheff]

The majority, but not all, of Bloomberg / Reuters economists think there will be a March or April rate reduction.



Every little helps. A 0.15% reduction in rates will put a little more money in tracker mortgage holders pockets and will help lower Euribor which helps determine some business rates and ultimately business expansion.

[broken link removed] - Looks like even ECB are looking at an alternative plan to rate reductions.

I agree that the ECB dropping rates will put a little more money into a tracker mortgage holders pocket...but the banks in Ireland will just up the variable rate to compensate...thus leaving Ireland in a status quo (if not net worse off).

The Refi rate is not linked to Euribor (or Eonia for that matter). They generally move in line, but not always


Look- I dont disagree that the ECBs strategy to improve the economy has been to drop interest rates. But rates are so low now that another cut wont make much difference. My point is that the ECB need to go a different route to increasing inflation to their target rate...and my view is that they will need to increase rates to start seeing inflation (and possibly lowered outputs). ECB will probably try increased liquidity first...but my view is that rate rises will happen sooner rather than later (i hope not for the sake of my mortgage..but I reckon thats whats going to happen).