End of rate hikes?

[RompelStompel]

http://www.fin24.co.za/articles/economy/display_article.aspx?Nav=ns&lvl2=econ&ArticleID=1518-25_2047684

Pretoria - The probability of further interest rate hikes in the new year is abating with tamer inflation numbers coming through, economists said on Thursday.

Statistics SA said on Thursday South Africa's producer price index (PPI) rose by 10% in the year to November, unchanged from October's 10% increase and lower than forecasts.

The PPI increased 0.5% on a monthly basis after October's monthly increase of 1%.

The PPI was expected to have increased to 10.3% y/y in November, a survey of 10 economists by I-Net Bridge found.

Johan Rossouw, chief economist at Vunani Capital said combined with Wednesday's consumer inflation data, "I am increasingly confident that we will not see any further rate hikes".

T-Sec economist Mike Schussler thinks that going forward, food prices are going to calm down due to the recent good rains.

"I think we are still going to see an increase in interest rates in February, but I think with yesterday's CPIX and today's PPI, the probability of interest rate hikes after February is declining."

Kabelo Msike, senior economist at Eskom Treasury said that although inflationary pressures are still real, they are softening up and "we could turn the corner against inflation in the next two months".

"These are good figures. They give some form of support to the CPI figures released yesterday.

Investec economist Annabel Bishop said: "PPI inflation came out slightly lower than expected in November, with little price pressure evident on the month other than that from food, metals and chemical products as expected.

"We continue to forecast flat interest rates for most of 2007, with the possibility of a 50bp cut at the October 2007 MPC meeting."

 

[nthdimension]

The problem with all this is that there are many factors at play, but if inflation stays at the same level or goes down Mboweni is going to attribute it to the interest rate increases.

 

[GavinMannion]

As long as we don't get many more hikes...

I think another 1.5% is about my limit before I start having some financial struggles....

So any possibility of a drop is well received.

 

[Geriatrix]

Right, a press release like that would probably get people on a spending spree again.Driving up inflation, debt and eventually a rite hike again.

 

[GavinMannion]

true, but it would make sleep better for a while

 

[Bageloo]

true, but it would make sleep better for a while

Oh how I long for the day when we will all be debt free...!

 

[Paul_S]

Oh how I long for the day when we will all be debt free...!

It's simple - don't buy something if you haven't got the money.
It seems that there are far too many people living beyond their means.

I really couldn't care what the repo rate is adjusted to or what sort of interest the banks charge.

 

[GavinMannion]

It's a bit difficult to buy a home without going into debt. Same for a car.

I am well within my means at the moment. However after another 1.5% it brings it to a total of about 3.5% - 4% increase since I got my bond on this house.

That works out to be a lot of money.

 

[Bageloo]

It's simple - don't buy something if you haven't got the money.
It seems that there are far too many people living beyond their means.

I really couldn't care what the repo rate is adjusted to or what sort of interest the banks charge.

hmmm! that's the hard part, especially with banks dangling all this credit.

 

[Pitbull]

Reason I like the rate hikes:

This is why.

If you have money saved in a account it means you get more interrest.
So if you have enough saved you actually gain from the hikes.

Reason I don't like hikes:

Some people are financialy good set. The people that are not get's nailed by this.... Truth is that the poor gets poorer and the rich get richer.

No isn't this the problem for the amount of middle class going down and the amount of lower class goes up ?

Just a question ....

 

[Bageloo]

It's a bit difficult to buy a home without going into debt. Same for a car.

I am well within my means at the moment. However after another 1.5% it brings it to a total of about 3.5% - 4% increase since I got my bond on this house.

That works out to be a lot of money.

Ja unless you catch the LOTTO, you can't really pay cash for your home. It's either you take the bond or build a shack in Diepsloot

 

[Paul_S]

Ja unless you catch the LOTTO, you can't really pay cash for your home. It's either you take the bond or build a shack in Diepsloot

I prefer the shack in Diepsloot - at least I can sleep at night not worrying about the bank manager breathing down my neck.
Same goes for my car - it's ancient but costs me very little to run and maintain.

People spend money they don't have to buy things they don't need to impress people they don't like.

 

[GavinMannion]

I prefer the shack in Diepsloot - at least I can sleep at night not worrying about the bank manager breathing down my neck.
Same goes for my car - it's ancient but costs me very little to run and maintain.

People spend money they don't have to buy things they don't need to impress people they don't like.

Personally that's a very narrow point of view.

I have two children that need a home.
So minimum a 3 bedroom place.
Schools are zoned so if I cannot afford a private school I need to make sure my kids can go to a good school.

Minimum I can pay for a 3 bed house in a good area??? R900 000

Now I need a car that can hold two adults and 2 carseats and offers the basic safety requirements such as airbags, abs and central locking. R100 000 minimum?

So I am instantly in R1 000 000 debt. +- R10 000 p/m to pay that.


So now I do that when I can easily afford R14 000 p/m. Seems fair. Now the rate goes up 4%, the repayments are now looking closer to R13 000 p/m which is getting scary.

It's easy to sit in a tower if you have lots of money and/or no kids. Fact of the matter is that virtually every single person needs to take a homeloan and car finance to buy a house and a car.

So tell me Paul, how did you manage to not have a homeloan or car loan?

 

[willirob]

end of rate hikes - ha - my bottom

 

[Sneeky]

I think there is more instore next year, at least another full percentage point within the first 2 sittings.

Cheap and easy credit now is going to take its toll after this years spending spree.

 

[willirob]

Cheap and easy credit now is going to take its toll after this years spending spree.

Esp. with the banks pushing credit before the new credit act comes in.

My unemployed wife was offered credit of R28000 - go figure

 

[Pitbull]

Esp. with the banks pushing credit before the new credit act comes in.

My unemployed wife was offered credit of R28000 - go figure

Eina !

The banks are really getting out of hand now.

 

[willirob]

and they keep pushing up my limit without asking - when I complain they say the letter is in the post - ha ha

 

[Bageloo]

Personally that's a very narrow point of view.

I have two children that need a home.
So minimum a 3 bedroom place.
Schools are zoned so if I cannot afford a private school I need to make sure my kids can go to a good school.

Minimum I can pay for a 3 bed house in a good area??? R900 000

Now I need a car that can hold two adults and 2 carseats and offers the basic safety requirements such as airbags, abs and central locking. R100 000 minimum?

So I am instantly in R1 000 000 debt. +- R10 000 p/m to pay that.


So now I do that when I can easily afford R14 000 p/m. Seems fair. Now the rate goes up 4%, the repayments are now looking closer to R13 000 p/m which is getting scary.

It's easy to sit in a tower if you have lots of money and/or no kids. Fact of the matter is that virtually every single person needs to take a homeloan and car finance to buy a house and a car.

So tell me Paul, how did you manage to not have a homeloan or car loan?

maybe Paul has a lot of cash stacked away somewhere. Unfortunately most of us don't. The house I live in does not impress anyone, not even myself, same goes for the car. It's just that it's easy to tell people to stay off credit, but If you are on a salary you don't really have a choice.

 

[Pitbull]

and they keep pushing up my limit without asking - when I complain they say the letter is in the post - ha ha

Your wife should take the card ! Blow the limmit and never pay them. He's un-employed they should have never given her the option to take the card.

LMAO. No but seriously you get debt now for anything... Listed not Listed....
doesn't make no difference to the banks anymore.