When ECB rates rise

[louball]

Sorry in advance if this topic is already discussed.
I was working on my household budget..which is always a year or so in advance and didnt know what to predict my mortgage payments any further than the next few months

So I was just thinking about when the ECB rates will start rising again and does anyone have any predictions?

it looks like a cut is on the cards this week and then assuming no more cuts..as soon as say Germany show recovery signs will they rise again and when do you think it'll be? end of 2009 ..first qtr of 2010??

if Ireland is still in a bad way at the time, with income tax and whatever other taxes in the December budget being targeted and then the rates rise its going to leave a lot of mortgage holders in trouble.

anyone got any thoughts or am I worrying needlessly as who knows whats down the line!

thanks

[louball]

no one even viewing this thread? have i put it in the wrong forum?

[jimmyfour]

anyone got any thoughts or am I worrying needlessly as who knows whats down the line!

thanks

No you are not worrying needlessly. Assume that within 2 years rates will be 4-5% + your lender's fee. Starting paying the extra into a separate bank account now as much as possible so that when the rates do rise, you have a slush fund to support it without being too stretched.

Basically, calculate your cost of living right now (food, taxis, bus, petrol, clothes, everything) and cut expenditure by 10-15% should cover you.

[McEavelli]

At the moment that's like asking what happens if Ireland sinks. There is no point in asking questions to which the answer is oblivion.

[Seos]

no one even viewing this thread? have i put it in the wrong forum?

It's only been 44 minutes and it's a Saturday afternoon.

Sorry in advance if this topic is already discussed.
I was working on my household budget..which is always a year or so in advance and didnt know what to predict my mortgage payments any further than the next few months

So I was just thinking about when the ECB rates will start rising again and does anyone have any predictions?

it looks like a cut is on the cards this week and then assuming no more cuts..as soon as say Germany show recovery signs will they rise again and when do you think it'll be? end of 2009 ..first qtr of 2010??

if Ireland is still in a bad way at the time, with income tax and whatever other taxes in the December budget being targeted and then the rates rise its going to leave a lot of mortgage holders in trouble.

anyone got any thoughts or am I worrying needlessly as who knows whats down the line!

thanks

The rise should be well after the first signs of recovery because ECB policy is to deal with inflation, it should be only be after eurozone inflation goes above 3% or looks to be going above 3% that rises will start. (2% is their target inflation rate)
I don't have any idea when that will happen but probably after 2010.

[louball]

thanks

jimmyfour..i am not worrying about me personally as i over estimate everything on my budget just thinking of people going to be stuck next year, will it increase repossesions say?

and McEavelli...lol thanks

[louball]

sorry seos..i went away from computer and it still said 0 views but after i posted that it jumped to 30 so i probably hadn't refreshed the page properly and just thought it was odd that there was no views..

as usual i was jumping the gun

[Seos]

sorry seos..i went away from computer and it still said 0 views but after i posted that it jumped to 30 so i probably hadn't refreshed the page properly and just thought it was odd that there was no views..

as usual i was jumping the gun

No problem, it was meant to be in a "relax" type of tone, rather than giving out or anything.

No you are not worrying needlessly. Assume that within 2 years rates will be 4-5% + your lender's fee. Starting paying the extra into a separate bank account now as much as possible so that when the rates do rise, you have a slush fund to support it without being too stretched.

Basically, calculate your cost of living right now (food, taxis, bus, petrol, clothes, everything) and cut expenditure by 10-15% should cover you.

While I don't think rates will have risen to anywhere near 4-5% I fully agree with your advice.

[Middleaged]

Well be certain of one thing, they will rise, when, if we knew that we'd make a few bob.

My view, 25bps reduction again next week and that's it, due to the severity of this recession all increases will be of 25bps starting in Q3 2010.

I am making one feckin large assumption here, and its inflation stays below 2.5%, anything above this and they'll move more quickly.

Save what you can, or pay down principle.

[Seos]

I am making one feckin large assumption here, and its inflation stays below 2.5%, anything above this and they'll move more quickly.

Yes, if you want to know what the ECB will do keep looking at the predicted eurozone inflation rate, this is the only thing that the ECB is meant to consider and their aim is 2%. So long as they predict inflation below 2% there will not be a rise at all.