Interest Rates In The UK Are Going Up For 2021 To Kill Inflation?

Do you think the government will bring up interest rates in the next year or two to kill inflation?

I don't think so, I don't think we've got inflation, increases and certainly if you look at the long-term interest rates there's no reason to. What they've done is they've stopped talking so much about negative interest rates now. The other thing is if you look at the economy they're bouncing back relatively quickly. We had a big drop 20.2 I think it was for the UK but it's come back you know which is quite good. You know China bounced back, Singapore where I am bounced back, Australia bounced back you know so a lot of these economies after Covid are bouncing back. Sure look there's going to be people who are unemployed there's going to be businesses that don't think you know and as I mentioned before in London you walk around there's places boarded up everywhere but you know I expect that. That's what happens in these circumstances you know there is a bit of a reset going on. I'm not too worried about inflation right now, there's nothing when I look at all the stuff that I go oh that's going to be a problem. My big concern when I heard that 40% thing I was like whoa hold on a sec but when I actually sat down and had a look at the actual figures, you know it wasn't so worried. Alan's just said is it really realistic for interest rates to remain as low rates they currently are and this will not trigger a bigger issue long term? Good one, so look i think with this is it realistic they can yeah they can I think they definitely can. The trend has been down for a long time and really there's no there's nothing pushing them up right now and there's i don't see for me personally I don't see anything on the horizon that's going to see they need to go massively up. So there's that aspect that is it going to create a bigger issue down the long term? That's the million dollar question you know. For me right now no even though we've got that 40% increase in money supply i think that was what was required to actually and it's probably going to go higher now by the way that was required to get us through the coronavirus stage one and stage two. What I think's going to be interesting is to see what happens in the US now. If they go into a lockdown that's six weeks or eight weeks and what happens there and the civil unrest and all that sort of stuff. It's a hard thing for a government right now because you've got the people that go comply and are happy to do that and the people who go stuff you. It's my right not to do that. It's a hard decision and you know I mean I wouldn't like to be in that position you know, what would you do? Do you steadfastly enforce the law? You know it's a hard one. For me is there a bigger picture issue? not right now I'm not worried about it could be you know I could be totally wrong. I don't think so. I'm more optimistic than pessimistic right now. And the question is I've seen enough say for instance at auctions where prices are going cheap that actually prices I think will you know they'll come down a little bit but nothing drastic and that's normal for winter pretty much you know so yeah we'll see how that all goes.Tim writes would you recommend fixing a mortgage for five/ ten years or remain floating take the risk that rates will climb? I think you can monitor it. I think for me it depends on your situation. If your risk profile is such that you know you're adverse to risk and you just want to lock it in and forget about it and it might be your home and actually you don't want to worry about it then by all means do that and then you don't have to worry. In actual fact if you look at the two year the five year and the ten year rates there's very little difference there's about a percent difference which isn't a lot over a ten-year period so you've got that level of certainty. The question then is do you want to take money out in the meantime the question is then are you building a portfolio and you want use of that money and it's going to cost you you know a fee in order to you know take it out or to pull off if you know if you want to leave after two or three years. It depends on your situation. I generally don't really fix rates unless i see the market turning and I can see that actually rates are starting to hockey stick up in which case I'll lock them in now but most of the time the banks are smarter than we are you know so they'll build in so they don't lose money. That's unfortunately that's just part and parcel of that. So yeah but yeah guys thank you um very much and appreciate your time and we'll see you next week any anything else you've got send through to the webinars@gladfish.com or check out the website www.gladfish.com and we'll see you next week thank you very much all right see you guys bye