Should we worry about the banks... and why raise interest rates now?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 24 March 2023

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

Just when you thought it was safe to go back in the water...

A banking crisis has seemingly emerged out of nowhere, in a system that we've been told is stable, well capitalised and far from its parlous state when the credit crunch and financial crisis struck.

So, what is going on and why did both the Federal Reserve in the US and the Bank of England see fit to raise interest rates this week?

On this week's podcast Georgie Frost and Simon Lambert talk interest rates: whether we have hit the base rate peak, when they might fall, why central banks keep raising them and what the impact will be for savers, borrowers and investors.

Plus, what's going on with the banks? Why the sudden wobble? What's it got to do with rising interest rates and government bonds? Is this just a shake-out taking out those that weren't very well run anyway, or something more dramatic?

Also on the show, Simon explains why he thinks some people might need to sell some investments now. (But not for the reasons above.)

And finally, are Pokémon cards really an investable asset? The This is Money team dived into the world of collecting hem this week, Simon explains what they found out.

Transcript

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0:00.0	Welcome to This Is Money Podcast. I'm Georgie Frost and joining me today is editor Simon Lambert.
0:07.9	And coming up, despite turmoil in the banking sector, rates go up again here and the other side of the pond.
0:14.0	Is that it, though? Or with an unexpected jump in inflation, are there more rises to come from the Bank of England?
0:20.2	And what does the
0:20.9	banking turmoil mean for you and your money? Plus, should you sell your investments now,
0:25.6	our Sarsar Simon, and the retro gear making a minted auction, thanks to millennials and Gen Z.
0:31.3	Don't forget you to up to date with all the latest breaking money news. Just go to thisismoney.com.
0:35.9	Or download the app. Don't forget, you can stay on top of
0:40.1	what's going on in the markets by tuning in to the Digest and Invest podcast by Itara. Go to your
0:44.5	regular podcast platform and listen on the go. Digest and Invest by Itoro, the podcast for those
0:49.4	interested in trading and investing. But first, against the backdrop of troubles in the global banking system
0:55.0	and an unexpected jump in inflation over here, the Bank of England up the base rate for the
1:00.0	11th time on the bounce. The rate now stands at 4.25%. It was just 0.1% 14 months ago.
1:09.1	While many analysts expect this to be the peak base rate, the Bank of England
1:12.9	boss is warning, more could be on the way if businesses hike their prices. So why is the Bank
1:18.8	of England raising rates? Why is the Fed raising rates? What does it mean for the economy and for
1:24.3	our money? Simon, it does seem wherever the Fed leads, the Bank of England follows,
1:30.3	but was this expected rise, 25 basis points?
1:34.3	Yes, it was the entirely expected scenario until the events of the past week and a bit unfolded.
1:45.2	You can actually go back two weeks to when the Silicon Valley Bank collapsed,
1:50.3	and we can call it a collapse.
1:51.4	It was effectively a collapse, happened or emerged.
	...

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