Interest Rates Highest for 13 Years 😳

So interest rates are the highest they've been in 13 years. They've just gone up to the highest rate in— look, who'd have ever thought that interest rates would be sub-1% for 13 years? That is very artificially low. In fact, you know, the long-term interest rate average I mean, don't quote me on this, but it's more like 5%, I believe. So, um, it's interesting. I intentionally took this headline from BBC News, um, because whilst the interest rates are factually the highest they've been for 13 years, we must not panic because they are only 1.25%, which is historically very low. My personal opinion is interest rates should go up a lot more. Now, generally speaking, interest rates are put up to control inflation. I'll talk about that in a moment. It's not the only way, but it's probably the main way. And many people who are smart economists would say that interest rates should have been put up a good while ago and should be put up more aggressively as a way to try and control inflation, which is currently apparently 9%, which means it's more, uh, and you know, the UK government say that it's likely to be 11%, which means more. So, um, the interest rates have actually gone up 5 times in a row, the 5th consecutive rise. They're clearly not got the kahunas to put them up significantly. I think they put them up a bit more in America just recently, um, but yeah, they've gone up from 1% to 1.25%. I think interest rates need to go up if we want inflation and the soaring costs of living to be controlled. Inflation— uh, interest rate increases, one way to do it. Carl's made a good point in the live, but when inflation is 10% or more how, how high and for how long have you got to put the interest rates up to be able to control them? There's a big lag that'll happen through the economy. So Sean Paul here thinks that inflation is more like 20%. I would say in the last 2 years your living costs have gone up at least 20% because there are certain, um, things that you buy that aren't put in the official inflation figures. Sometimes in some of the indexes, food is not put in, or asset prices aren't put in. And by the way, food and asset prices, if you're an entrepreneur or, you know, you just want to survive, food and asset prices are a huge part to play in your cost of living. So yeah, 5 times in a row now the interest rates have gone up from virtually zero now to 1.25%, and they're the highest they've been in 13 years. But there's definitely no need to panic yet. You can still get good fixed rate mortgages, um, and people forget that. Like, I've had one of my clients today is like, I'm worried about interest rates going really high. I said, get a 5-year fix. She's— 5-year fix is less than 3% interest. So, you know, paying 3% or less interest is quite a low repayment because, like I said, the long-term average is more like 5 or 6. So if you can get those fixed-rate mortgages in now, then— now look, they do try and price them in where they think interest rates are going to go, of course. But if you can get rates at under 3% fixed for 5 years, you're pretty safe. That's not too bad. Also, she said, but what if they go really high and in 5 years I come out of my fixed rate and, you know, they're really high? Well, you could save a little bit of money and self-insure. For example. Paul said he got a 5-year fix at 0.5%. Yeah, I mean, you can get lower fixed-rate mortgages, but, you know, generally there's a bit of a margin put on top. It depends if it's commercial or residential. It depends on the loan-to-value that you get. Um, so anyway, let me know what you think. Do you think, um, interest rates rising is good or bad? Do you think that, you know, people should be fearful or not? I'd love your thoughts in the comments. Um, so the Bank of England has said that energy prices were expected to drive living costs even higher in October, but added it would act forcefully if necessary should inflation persist. Capital Economics speculates that, um, the bank could soon enough raise interest to 3%. So that's wordy, but basically interest rates could go up to 3%. I think that's Likely, very likely. Now, a 0.25% rise, you know, rise from 1% to 1.25%, actually means a tracker mortgage is about £25 a month more. Anyone on an SVR, standard variable rate, might see a £16 a month increase. So look, you know, interest rates highest for 13 years, true, but no need to get scared just yet. Um, three-quarters of mortgage holders currently have a fixed-rate mortgage, so actually they're not affected at all. So let me know what you think in the comments. Interest rates have been put up from 1% to 1.25%. Um, they've gone up the last 5, um, reviews in a row, um, which is obviously significant, but like I said, they're way below the long-term average. The long-term average— I'd go and have a look online, but I believe it's about 5%, so it's way lower. So don't get sucked in by all the, the panic. Natalia said, at what point should we panic? Well, I suppose you panic if it goes up, you know, 8%, 10%, 15%. But, um, people remember the times when interest rates went up to— went up that high. They didn't stay there very long, and they wouldn't be able to stay there very long. Um, I don't see them going there. I can't see our current government, um, putting them up to crazy amounts. They would have done it already if they were, um, you know, thought that putting interest rates up was the right thing for the economy. So it doesn't— it makes sense to me that they're edging it up. But, um, you know, every upside has a downside, every downside has an upside. So High interest rates usually means low inflation. So if inflation is lower, your cost of living is not going up as much and your money isn't getting devalued as much. High interest rates are really good if you hold cash because obviously you're getting interest on the cash. If you lend money, high interest rates are really good because obviously you're getting more interest. But of course, inflation is bad for savings Inflation is good for debt. I have nearly £30 million worth of mortgages. Inflation has paid off £4.5 million for me in the last year, relatively speaking, so that's really good. But obviously I've got one bank account with over £3 million in it, and so that's cost me £450,000 in inflation if I'm assuming inflation is 15%. So you've got to look at the upsides and the downsides, and most people see the media and the news and they think inflation is really bad. Inflation is really good if you've got good debt because it's paying off your debt for you. Don't forget, that's what the government do. The government pay off their debt by quantitative easing, by printing a load more money, by devaluing the money in the system, which is essentially inflation, and they erode the value of their debt. And if you have good debt with mortgages and good loans that, um, pay off assets, high inflation is really good for you. High interest rates is really good for savers. And lenders. So it's not all bad, and you just gotta try and hedge the upsides and downsides. You know, you get caught with your shirt off if you've got a load of variable rate mortgages and interest rates go very high for a very long time. So let me say that again, because for those of you that are scared and you ask, you will get caught with your pants down if interest rates go very high and you're on variable rate interest and they last for a long time. Because look here, a tracker mortgage only went up £25 a month on average from a 0.25% rise. Assuming that's linear, 1% rise, £100 a month, 2% rise, £200 a month, 3% rise, £300 a month. You can self-insure, which means you can just save a little bit more extra per month, um, and then just keep it aside, even maybe in an ISA or the stock market. In a spread-managed fund. It's liquid but it's protected from cash. And, you know, by the time your fixed rate ends in 5 years, you've probably built up 3 or 4 years' worth of really high interest payments as savings, as what I call self-insurance. So that's a really good way to negate against a worry about interest rates going really high. I just don't think the government have shown any proof that that's what they would want to do because it's been so low for so long. So thanks for tuning in. Let me know what you think in the comments if, um, the interest rate rise that's just happened is good or bad. Um, try and stay cool. Um, if you're getting any mortgages, try and get as long a term, a fixed rate as you can, because you can still get really low rates. Obviously, interest rates going up is good if you're a saver or a lender, but at 1.25%, it's way under inflation. And let's be honest, a, um, a 0.25% increase in interest rates, even every time they review the interest rates, is nowhere going to near touch the sides of how high inflation is and control those costs of living. So a lot more has to be done if the cost of living wants to slow down. But by the way, interest rates is just one way. Increased supply is another way. Um, life getting back to normal and just, yeah, Like, there's so many things. All the billions that the government have been putting into wars and lockdowns and, and other things like that, that all these things have an impact. And, you know, government could control prices, so they could have ceilings on fuel and force the fuel companies to pass on the savings to the consumers. Which most of them didn't. They could do that across many industries where there is soaring prices. There's lots more the government can do, and I'm not sure that they are doing it. Let me know what you think in the comments. Thanks for tuning in. Hit the share button because obviously the interest rate rise happened today and a lot of people don't know about it. It's important to stay balanced and not get sucked into fear. Oh, interest rates have gone up, they've gone up 5 times in a row, they're the biggest they've been in 13 years, but it's really not that bad. Um, Betty has said, is it a good time to buy a house? Well, number one, is it a residential that you want to live in, or is it an investment? And number two, how long do you want to own it? And what are your goals? Do you want to make income from it? Um, have you got some spare cash you want to protect? These are all these things that you've got to think about when thinking about getting a house and a mortgage. By all means, let's have a chat about that in the comments. Um, also, um, I've got a How to Invest series on my Rob.team platform. So, um, I know I've had many hundreds join from my lives over the last few weeks, but if you're not yet on Rob.team, um, just open a new page and type in Rob.team, because a lot of you are asking about investments and mortgages and interest rates and things like that. And I've got a 9-module, 10-hour series just launched live on rob.team, actually with one of the top UK entrepreneur investors. Real estate and property is covered, cryptos and Bitcoin and gold and watches and art and classic cars and the stock market and Isis— they're all covered. In fact, if you want, I will interview one of the top property investors in the whole country and we'll do a masterclass on it on rob.team. So if you go and join now, I'll commit to that. Um, the link is rob.team. You can join anytime. Well, you just join now. You can cancel anytime. It costs a large coffee. That's it. You can cancel anytime. It's a monthly thing. Um, Andrew Butt says that rob.team is great. I can recommend being a part of it. Thank you, Andrew. Um, and there's loads of content on there. I do masterclasses now every 1 to 2 weeks. I'll commit to doing a real estate and a property one, commit to talking about interest rates and mortgages and whether the— is it— what's a good time to buy and how to buy good property investments, etc. I think there's a big crash, recession, depression coming. There's going to be great buying opportunities. Let me know what you think in the comments. Is it a correction, a recession, or a depression coming? You know, good, bad, or ugly, what, what's— what do you think is going to happen? Because if prices come down and asset prices come down, which they have to, because what goes up must come down— ask the man who invented Viagra about that— what goes up must come down. I believe there's great opportunities for investing in assets at reduced prices, whether it's, um, you know, physical tangible things like gold and, um, watches, and, uh, or whether it's property and real estate, which is great because property is capital and income and and appreciation. So you get a triple win with property. So I will commit to doing a property investing masterclass for Rob.team members if you go and join Rob.team right now. How you join is you just open a new page, you type in Rob.team. Do it right now because talk doesn't cook rice. When all is said and done, more is said than done. Go and do it now. It's just the cost of a large coffee a month. You can cancel anytime. There's masterclasses going back 3 years. There's content on creating digital assets, monetising social media, building a personal brand, my 9-module, 10-hour How to Invest series. So much content on there. I think it can really help you. And of course, with all the news like this, a lot of people are scared and they, they don't know what to do. And that's why I set up Rob.team. Chris Irvine is joining. Chris, go and join right now. Just open a new page, type in Rob team. I'll see you in there. Interest rates have just gone up. They are the highest they've been in 13 years. They've gone up 5 times in a row, but they're still very low from the long-term average. Do not panic. Um, and there are upsides to interest rates going up— more for savers, more for lenders. There are downsides of interest going up if you're a borrower. That's going to affect you. But there are downsides of— there are upsides of interest rates going up, which hopefully helps curb inflation, though it's got to go up way more. To stop this huge, um, tidal wave of our cost of living, which is just— there's so many other factors. We'll do more videos on it. Thanks for tuning in. Hit the share button. Join Rob.team. 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