When will these historic Low ECB Interest rates End?

ronan45

Just wondering does anyone have any views on when The ECB will start pushing up the Interest rates? Obviously its not going to last the next decade. So would anyone here think we could see the ECB rate start to rise back up within the next 3 years? The banks and governements have a large hole to fill so will we ultimately pay the price of these low rates in years to come?

http://www.project-syndicate.org/commentary/how-long-for-low-rates-by-kenneth-rogoff

http://www.youtube.com/watch?v=KZC0-sdNJ8k

average_runner

The rates will be low for the next 5 years as europe in severe trouble

Gumbo

average_runner wrote: »

The rates will be low for the next 5 years as europe in severe trouble

I'll be delighted if your right

Geuze

As low as 0.75% for 5 years - unlikely.

Below their long-run average for 5 years - maybe.

Geuze

Within three years....

Rise from 0.75% - yes, I can easily see that happen.

Rise to, say 2% - yes, I could see that.

Rise back above a long-run average of 4% - unlikely.

Joe 90

In fact what will happen is that at some point there will be serious pressure on the Euro. Then rates will rise and probably quite fast.

Geuze

By that you mean a falling euro?

It has fallen from a peak of USD 1.55-1.60 down to USD 1.20 recently, and I didn't hear any big issues with that.

It also fell from a high of 90p+ to below 80p, again, no big deal with the ECB or any euro members.

Indeed, a lower euro is welcomed by euro exporters.

howamidifferent

Based on any financial analysis I've read over the past few months from numerous sources and publications, the US economy is in free-fall despite all the monopoly money being printed, China is slowing and will soon be in the same boat as the western world, as demand for cheap electronic tat dries up. And Europe has done nothing to fix the rot that's been evident for the past 4 years.
Plus the situation in the arab nations and muslim states is indicating another war on the horizon. All pointers seem to indicate the worst is yet to come for all economies. Based on this analysis I don't see interest rates rising any way substantially anytime in the next 5 years. More likely they will stand still for a long period of time between any moves up or down. Nothing to push them upwards on the horizon.

I would say (with respect to the OP) that a better question, rather than how long the low ECB rates are going to last, is "when will Irish variable rate customers start to see a reduction in their borrowing costs as a result".

Banks here have been strangling the life out of mortgage and general borrowers, increasing rates, not passing on cuts, and not paying a blind bit of notice to what the ECB is doing in terms of rate reduction for the last 2-3 years. It's getting to the point now that their shenanigans(which they would say are in the long term interest of the taxpayers, their shareholders) are putting the Irish economy's chances for recovery considerably behind many of the other EU economies by virtue of limiting consumer spending and taking significant purchasing power away from many customers with mortgage and loan agreements.

moneymad

ronan45 wrote: »

Just wondering does anyone have any views on when The ECB will start pushing up the Interest rates? Obviously its not going to last the next decade. So would anyone here think we could see the ECB rate start to rise back up within the next 3 years? The banks and governements have a large hole to fill so will we ultimately pay the price of these low rates in years to come?

http://www.project-syndicate.org/commentary/how-long-for-low-rates-by-kenneth-rogoff

http://www.youtube.com/watch?v=KZC0-sdNJ8k

I think we will see negative interest rates before we see positive.

Farmer Pudsey

moneymad wrote: »

I think we will see negative interest rates before we see positive.

Unless Irish banks get access to cheap funds I cannot see us havein negative intrest rates in real terms. I cannot see the Ecb rates rising in the short term the outlook is another 1/4% reduction before christmass. Even if rates do not fall further they is unlikly to be a rise next year for it to rise 1 and 1/2% in 1014 would be unlikly so we can expect intrest rates to remain below 2% until 2015 more than likly.

The ECB has learnse it lesson after it drove the euro zone into recession by rate rises in 2010 it now relises that it must look at the whole eurozone not just Germany.

stackerman

howamidifferent wrote: »

Based on any financial analysis I've read over the past few months from numerous sources and publications, the US economy is in free-fall despite all the monopoly money being printed, China is slowing and will soon be in the same boat as the western world, as demand for cheap electronic tat dries up. And Europe has done nothing to fix the rot that's been evident for the past 4 years.
Plus the situation in the arab nations and muslim states is indicating another war on the horizon. All pointers seem to indicate the worst is yet to come for all economies. Based on this analysis I don't see interest rates rising any way substantially anytime in the next 5 years. More likely they will stand still for a long period of time between any moves up or down. Nothing to push them upwards on the horizon.

+1
But we will see further and higher inflation !

If interest rates increase, the US, UK and MOST EU countries will not be able to pay their debts. Those that could, will have masive defaults to deal with. The same leaders who need to pay the rate, set the rate :rolleyes:
I heard one figure - That if interest rates went up to 3% it would take all the US income tax take, to cover just the debt :eek:
Regardless of the accuracy of this figure, the concept still stands. The debt levels have gone past the "Minski moment" and therefore there will be no return to higher interest rates, any time soon.
The one thing which may change this is, a BIG collapse of the economic/banking system. IMHO this is a real possibility, further down the line, but does not overly concern me - with regard to my debt (nice and high like many). The reason - if there is a collapse the value/cost of my debt will also collapse. In fact, all this QE in the EU, US, UK, Japan etc etc is designed to do just that - inflate the debt away !!