Why Aren't Interest Rates Dropping?

The MPC announced today to hold rates and gave insight into when we can expect them to fall.

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[DamienTalksMoney]

0:25 Six voted to keep the rate, not three! There are nine members of the MPC, and the votes were six to hold, two to increase, and one to cut. I rush to get these videos out same day and missed this mistake in the edit sorry!

[Alex-cwrz]

The fact the government had an entire decade of low interest rate loans where they could have done huge investment in housing, technology, transport yet instead did nothing, is very depressing. Almost as much as how much money we lost, by not setting up a sovereign wealth fund like norway did with it's oil.
Edit : saying Norway population is smaller is a revelation to nobody it is worth £1.15 tillion, it is nothing to dismiss. Let alone the fact it is our oil.

[duncanridgley]

I spoke with and Egyptian today ( I have a place here out in the desert) she said she works for Tui call centre. She asked me " UK in a problem? Many people are calling the help line saying they cannot afford thier booked holidays as they have lost thier jobs"

[chqshaitan]

"venus aligned with mercury" love it haha, should have mentioned mystic meg :) keep up the great work bud, really enjoy your down to earth videos

[mrmeldrew]

This country is a nightmare.
I've taken on a second job and as a result I'll be around £4K over the upper rate tax limit.
That £4K will get taxed at 40% AND I'll have to pay back around 40% of the child benefit my wife gets for our two boys.
She doesn't work, so we are not a 'high income' household.
So punitive.

[Callofdootie]

I don’t need an emergency fund. The government will bail me out. Oh no I’m not a big business, crap.

[JoshW]

Unfortunately I've been told I'll be made redundant in April. However, thanks to learning bits of personal finance. From My education and watching you, Damian. I've found myself with an emergency fund and a fairly sized portfolio. Which eased the pressure on myself, allowing time to look for a job I want to do.

So thank you for your content 🙌🏼💪🏼

[darrenjosephgregory]

'I don't want you to be one of those people' You're a top man Damo 👏👏👏

[Whizzer_]

I'm British, moved to Japan in 2015 aged 30 and I'd never consider moving back. The standard of living is really quite low for most people, I just never appreciated it until I emigrated.

[petrpalecka]

07:30: "This is America". It happens all across the western world. If I were a manufacturer of consumer goods, I would consider production costs and local wages. Within the EU, it happens that businesses processing food tend to relocate from countries like Germany to Poland, because the wages in Poland cost them less. Hence, they can sell more in western countries because they wouldn't have to increase much their prices in accordance to western wages. Inflation is higher in the eastern part of the EU, but given the wage disparity, a small increase in the west has a higher impact.

[Muxxyy]

'Loosening the labour market' will do nothing to lower the inflation when an average UK wage is under £15/hour anyway.

So much of UK economy is now minimum wage that there's simply nowhere to fall.

[bobbydwheelhouse]

Asset stripped and sinking gradually back into the sea. An absolute shambles of a country.

[EHancock]

Nice one Damien I’m definitely focussed on building that emergency fund we’re in for some tough times in this country…

[Alex-cwrz]

The most annoying thing for me is that we know that current inflation is not caused by people spending too much and too much money supply. It is caused by supply chains and profits. Something high interest rates do nothing about. They are bashing a square peg into a round hole and we are all getting splinters. Yes the bank of england has limited tools and not one tool to deal with the current issue, it should therefore petition the government to change policy, instead of punishing the average person, who is also being the most effected by inflation (obviously the poorest in society the most).

[mst]

Thanks for the video. Your end messages rang all too clear today with my wife being told she is being made redundant. Absolutely devastated. We're in a relatively good financial position with emergency savings but we've both been investing hard for years to help come retirement so cancelling those direct debits today nearly broke me. Sickeningly these rate hikes seem to disproportionately impact people like us who need a mortgage and occasionally loans while those with stacks of cash are enjoying the boost to their savings! Stay strong all❤

[yonnatanghemit]

This is really telling. Definitely need to up my skills and have a plan B incase I get the boot. Thanks Damian x

[godsakes]

Totally agree with you that interest rate predictions cannot be taken seriously... last financial crisis when we were supposedly heading for a credit crunch, logic would suggest that rates have to go up to attract lenders. Nope they just drop rates to zero.

[martynjames]

Central banks 'appear' to be able to control interest rates just by making declarations. But it is not that simple. They cannot just say - we'll set it at x%. They have to buy/sell in the market to such an extent that the interest rate 'self' adjusts. If a foreign entity will not buy what your selling, the commodity = money, with say a 3% rate, then you will have to offer it at 4, 5, or 6% to make it more appealing. It can be very expensive to lower the rate and a bank can just - not afford it. If your currency becomes unattractive, because the govt. overspends causing massive inflation, then no one will want it internationally... except at higher rates. Thus, the one main way to address the issue is to tell govt. not to overspend = balance the budget.

[RockG.o.d]

I have wondered why people accept a 2% inflation target and not a 1% or 0. I know why they don't have a 2% deflation target, and say any deflation is bad. They need to keep the government debt manageable, and that 2% inflation gives them easy money to spend. maybe that's the only reason why they target 2%.

[steveclayton]

I just don't see the interest rates going down much at all this year if any. The one good thing that's happening with the interest rates increase is that people coming to the end of their mortgage deal are paying down their mortgages. Santander in their results announced overpayments are up 78% v 2022.