Market watch: Interest rates and a chicken break!

Some good news from the mortgage sector!

In recent days we have seen the introduction of some new 5 year fixed rate deals from a few lenders that are currently set at 0.25% BELOW the base rate and in a recent article by Daniel Morgan, head of data services at Rightmove, he identifies the current cheapest 5 year fixed rate available at the time of writing is at 3.75% and alludes to sources indicating the possibility of potential 3.5% deals coming to the market in march.

Why is this good news? Well, banks aren’t in business to do us favours. Their business model is to make money for their shareholders. Why, therefore, would they lend money to ordinary people at a loss? Answer: They wouldn’t.

So, what’s going on here? Unlike during the last recession, banks currently have got plenty space on their books and plenty of funds available. They are very much eager to lend. OK, some of the products on offer may well be front loaded with hefty product fees to negate any savings you might appear to be making in the short term. However, not all products will have big fees associated with them. The short answer is the banks offering these below base rate products are hedging their bets that at some point the base rate will not only dip underneath the rate that they fix the customer at, but that they will dip quickly enough and by enough percentage points to leave them with a healthy margin to make a profit over the course of the term of the product. They also take advantage of a mechanism known as swap rates which are effectively an agreement between two institutions whereby, they agree to exchange one stream of future interest payments for a different stream of interest payments based on an agreed principal amount to mitigate their own liabilities.

In real terms this means they and therefore we can expect, at some point, to see the bank of England base rate begin to fall. Market experts are predicting that we can likely expect to see an increase in the base rate at the next revision, however hopefully we should start to see that figure adjusted downwards thereafter towards the bank of England target rate of 2%.

Ultimately that good news extends far beyond the mortgage sector and into every facet of our lives that involves directly or indirectly leveraged funds.

Make no mistake, the road ahead still looks a little bumpy, but hopefully some of the potholes around the bend will have been filled in!

Popeyes Chicken

A relatively new face to the high street in Nottingham.

Fast food, by and large, doesn’t get a lot of great press. It’s supposed to be cheap and fast but in a lot of cases, particularly with the current rate of inflation it isn’t as cheap as it was and often isn’t particularly fast either.

This is, however, my 3rd visit to the newly launched Popeyes. Located adjacent to the main entrance to Nottingham’s Victoria centre, it’s ideal if you find yourself in town mid-week. Like most fast food restaurants, the food and atmosphere tend to be best when it’s not too busy and not too quiet.  

The building has been refurbished nicely and it seems light and clean. Not much of a personal touch in terms of service, but that’s typically par for the course with fast food.
One thing they do nicely is the coating on their chicken. It’s very crispy, very thick but surprisingly light. It’s a little bit “marmite” in that you’ll either love it or hate it, but if you’re a fan of “the other chicken chain” you’ll appreciate this place as an alternative option.
I would also highly encourage you to try a “biscuit” (effectively a savoury scone) and gravy. Very different. Very tasty.

Their Cajun fries dipped in their signature Voodoo sweet chilli sauce is also well worth seeking out.  A word on the fries… crispy, light fluffy. Basically, everything you want in a chip! Well done Popeyes

Hungry Surveyors choice:

Spicy deluxe burger
Fries
Mac ‘n cheese
Still water

Summary: OK, it’s fast food not fine dining. There is a ceiling to what you can expect. If you need something quick, KFC isn’t tickling your fancy and Greggs is out of sausage rolls, then this isn’t a bad substitute. They do certain things very well like that crispy chicken coating – that gets a firm endorsement. However, with so many excellent independent café’s in Nottingham, a chain restaurant might possibly not be your first choice to grab a bite, but on those days where you want something quick there are plenty of worse choices that you could make!