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Welcome to MFB-TV on Tuesday 27th September. Global concerns over European sovereign debt
and the strength or otherwise of the European banks abound. Will all the European countries
really sign up to the two trillion euro package within six weeks without haggling? Failure
to do so will be potentially cataclysmic but politicians rarely look beyond the end of
their proverbial noses. But does this actually matter? Sadly it does as banks are holding
back lending capital and margin pricing is rising. This may last for a while as all lenders
compete for capital and deposit rates rise to attract funds from savers. The MPC from
the Bank of England meets this week on Thursday and it must be an absolute no-brainer that
Bank Base Rate stays at 0.5 per cent yet again. The only question is whether the number voting
for QE [quantative easing] increases from just Adam Posner and even if it does, the
expectation is that there will be no improvement until inflation has peaked towards the end
of this calendar year. Given this backdrop we think this new product at 4.48 per cent
fixed for two years, with a flat fee of £1,999 on completion will prove attractive to those
borrowing more than £200,000. With an ERC of just five per cent in the first year and
four per cent in the second year, it also works well for investors whose tax planning
reduces their disposable income and visibility to the tax man. For these and all other enquiries
do phone us on 0845 345 6788.