Interest rates – will they increase again soon?

With interest rates held at 0.5% by the Bank of England, one of the questions being asked now is when will they increase again?

The strategy of governments basically throwing money at the problem in an effort to kick start financial recovery may or may not be working – to be honest, it is not that easy to assess this and draw a conclusion of any value just at the moment.

So what should spread betters do?

Spreadex state their customers are tending to look at interest rates staying low until at least December 2010 offering investors opportunity to bet on future LIBOR rates (London Interbank Offer Rate).

LIBOR measures the rates at which banks lend to each other and can also be used by institutions to lend money to overseas buyers of UK manufacturers/supplier products.

Whilst influenced by normal base rates, LIBOR doesn’t necessarily move in line with it.

With little movement in futures prices, those interested in this market for spread betting may want to consider thinking about placing some year end bets on.

Perhaps put this bet in place to support shorter base rate interest bets. You are already watching these markets then so there would be little additional work involved monitoring the situation.