Q&A: When will interest rates rise?

when the cuts start we could go back into deppresion so i dont think intrest rates will rise for some time to come

we are in totaly uncharted waters no one knows the true answer

Until interest rates match inflation all savers will be losing money by saving. I a way they are paying for everyone who as over-borrowed. It's only fair for them to rise and the sooner the better.

Put your money into land, at least you can have a picnic. Its not made any

more !

Low interest rates cannot help the economy.

All they do is redistribute existing resources from one group of people (savers) to another (borrowers).

It is as simple as that.

So, NOT ONLY as a taxpayer my taxes are bailing out the banks who over-lent.

BUT ALSO, as a saver my savings are getting pathetic interest to bail out the homeowners and buy-to-let landlord who over-borrowed.

@dislexic landlord - oh, my friend, you have so much to learn. If you're really a landlord and your dYslexia (sic) extends to numbers as well as spelling you're in for a cold, bitter shock... Just saying "we are in totaly uncharted waters no one knows the true answer" demonstrates a profound, depressing and lazy lack of thinking.

@Peter Snow - nicely and succinctly summarised. We are in the hangover of New Labour's cynical wealth re-distribution by stealth. The Tories are CONSERVATIVELY bringing this country back to sanity. I think and hope so anyway. I pray to my Father (God) that this is the case.

I was taught to live within my means and to save regularly. From some of the interest I received I would indulge in my hobbies, etc. However, now that I am receiving minimal interest and my capital is suffering from the effects of inflation, my non-essential spending is severely curtailed. If all other savers are doing likewise then the economy will be looser.

To Christ Jesus - praying never works. I've tried it - disappointment EVERY time..

Low interest rates, ie low cost money, is needed to boost bank profits. It is another way of passing the cost of bankers' stupidity, mismanagement and greed to the ignorant public. It as ever thus.

Low interest rates are just another form of stealth tax, the banks are being allowed to make profits to pay the interest they are being charged by the government bailout, Who is paying yet again ? Yes you and me.

If you saved and were prudent and tried to secure your own future and what happens. You get no returns for your money and those that have no money and have borrowed the ends of the earth,laugh down their sleeve and think how clever they are getting someone esles money for nothing.

No small wonder we are in such a mess.

History dictates that interest rate should be at 5% so lets go back there then.

If there are casualties,so be it .

Low inflation and interest rates were a con. We never had low inflation in the UK. Low rates allowed the banks to blow up the property bubble and pleased the government by injecting masses of credit into our consumer based economy.

0% rates are now a desperate attempt to prop up house prices and compel investors to buy houses rather than keep their money in the bank.

Money supply expansion without real economic grow is stagflation and its exactly what the UK is experiencing

For many years I worked 65 hours, 7 days a week so I could retire early. With a tiny fixed pension I relied on interest from savings to live. Now with no interest, I am living on capital. I will not be spending one penny that I don't have to, for the foreseeable future

I am with Peter, and 'the messiah' (putative).

Interest rates need to be raised. Now, a tick now and slowly increase over the next year to reasonable levels. Yes the bankers contributed to the crisis, but so did the borrowers and they stand condemned equally with the bankers, but I do not see the same hue and cry about them. Why, because likely many are your near neighbours who 'slightly' bent the rules to get a bigger slice. The bankers are condemned because the didn't do proper diligence to see that the borrowers could easily cover the repayments, relying on the ever spiraling price of land, and yet still paying themselves fancy (and fanciful) bonuses after having been bailed out, suffering no loss as a result of their negligence (not forgetting the fancy pensions/expenses of the PMs and MPs who allowed this).

I say slowly so that there is no dramatic effect, but it is time that the savers are rewarded for their prudence.

Them there bankers and borrowers have had a 'free' ride for the last 18-24 months, and the pendulum has been artificially held in the outswing position for too long, far too long. OK, control the swing back, but there needs to be movement.

More to the point, it will reduce borrowings, less for the banks and reality needs to be brought back to the market place, love within your means, governments, people and companies, no more living in cloud cuckoo land and on the never, never and a solid dose of reality for the able but otherwise feckless idle and breeders for homes and £s. As for employees, some, your demands need to be reasonable, and not out of step with the market, and that goes for a number of state employees and cabin staff, BA.

Citiwire, the comment box needs to scroll down with the typing, it did before.

Server Error in '/' Application. message again, infuriating.

like many of your readers I too was prudent and saved for my retirement. Now I spend most of my retirement surfing the net desperately trying to find the best interest rate available and becoming increasingly more savvy and street wise regarding my savings. After much research I decided to put about 5% of my savings into preference shares which although having a slight risk really do provide a quite substantial income. Before rushing out and buying them however some points to note . Like gilts or shares the price can go up or down. National Westminster 9% preference shares (NWBD) actually dipped to around 60p at the height of the financial crisis. They now stand at around 107p which means the yield is 8.49%. At the start of their life they were around 160p. Also there is a spread between buy and sell price of around 5p. But if you are just using them as a form of income both these factors don't really matter. And, also, there is no tax to be paid on them. The rate quoted in the name of the share is net of tax which has already been paid. The best ones to get are those that are irredeemable i.e the company cant force you to sell them back (even for redeemable prefs that rarely happens as then nobody would buy bonds from them again), cummalative i.e if for some reason the company misses out a payment they have to pay it back later and convertable ( the bond holder can change them into shares not sure how this works ..if some other reader could enlighten me I would be most grateful). All of these condtions are in the name of the pref . Of course things can go horribly wrong such as with Lloyds bond holders who will not receive any dividend / interest payments till at least 2012. Like shares they are not protected by the FSCS. But at the end of the day they are a great deal better than rip off annuities where you can never get any of your capital back. For more info go to http://www.preference-shares.co.uk/. and also http://www.fool.co.uk/news/investing/company-comment/2009/02/12/preference-shares-not-just-for-the-big-boys.aspx where you can find a link to a list of these shares...Good luck ...

When real interest rates are negative we have state sponsored THEFT from the prudent to the reckless. The only logical behaviour then is to be reckless. More debt is the only logical answer. But I thought debt was the problem? Lets fix the problem - let banks go bust.

Not very encouraging.If I understand rightly, with the exception of savers, it is in everybody interest to keep the interest rate low, so the attitude is let us keep it low(even if it means that we have to ignore the real inflation) and hope for the best.My advice to borrowers is to be careful specially when I read "meaning that we could import inflation,"Osborme and King might be able to twist the GB

economy reality but I am afraid that they do not have a lot of power when it comes to the world economy.

Anonymous 2, The more I think about it the more I know you you are right!.

The Government simply needed to declare the Banks insolvent (if they were), send in the administrators, declare the shares as valueless, write a 'They Owe You' to the creditors of the banks and give the bill to the shareholders, ie remove the 'Limited' part of the title. In fact, do it for all companies.

Now That, Ladies and Gentleman, would be true capitalism. So true that it would teach the world to really live within it's means, and really put it's money where it's mouth is.

Thinking on the hoof, I conclude that capitalism as we know it today, has built in self-destruction.

I think low interest rates are fantastic. I have a 0.18% above base rate lifetime tracker mortgage with barclays. My £130K mortgage costs circa £80 per month in interest. This has meant that for the last 18 months or so, I have been able to put away the £500 per month that I was paying in interest. The longer the situation goes on, the quicker I will pay off my mortgage!!

In my opinion though, the emergency budget will suppress inflation and the BOE/Government will not want to do anything to encourage the economy to shrink further. I reckon we will not see interest rates go up for at least 12 months, hopefully a lot longer!!