Tuesday, May 15, 2007
No surprise
BBC News: Inflation slows to 2.8% in April
The UK's rate of inflation slowed in April after energy bills were cut, official figures have shown.
Posted by sold 2 rent 1 @ 11:55 AM (143 views) Add Comment
9 Comments
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1. dohousescrashinthewoods said...
The FT's angle:
http://www.ft.com/cms/s/c65efaf8-02bb-11dc-a023-000b5df10621.html
2. Rickyb said...
Lower energy bills just means that I have more money available to pay for the other items in the basket of goods, enabling retailers to increase prices on everything else instead. If the B of E are hoping that decreasing energy prices are going to get them out of the inflationary mess they have got themselves in, then I'm afraid they are in for a big disappointment.
3. Waitingfor Hpc said...
load of ********. petrol going up now 97p where i am - but no mention on inflation??
4. sovietuk said...
Phew that's alright then we're safe, no need to raise interest rates again, the new target of 3.1% has been beaten by a good solid 0.3%.
The only thing is - what does 2.8% actually mean? - Quick definition "A 2.8% price increase in carefully selected items chosen so that they cause downward pressure on the price increases on the items that cannot be hidden in the measure" and also "A 2.8% price increase coveniently designed for perpertual economic plate spinning whilst the existing chancellor is safely installed in the house next door"
5. talking rot said...
Sorry fine fellows
Whether or not we think the CPI is a good or poor measure of inflation is immaterial. What matters is that the BoE has to use it to target inflation within the 2% +/- 1% band over a 2-year period. I still believe interest rates will not rise above 5.75% by the end of the year and we'll see cuts in early 2008. Rising interest rates are unlikely to be the sole cause of a decrease in house prices.
6. Papabear said...
I also think there is often too much emphasis put on interest rates as a potential HPC trigger. Even if rates do rise, it is unlikely they will go too far above 6% which is still within most people's comfort zone. It will, unfortunately, have to be something 'bigger' that will shake people's confidence. At the moment the whole market is just like a giant pyramid scheme where people at the bottom still believe that there are bigger fools coming in right behind them...
7. David20040_0 said...
It;s true, interest rates will never hit 6% this year and they will most likely drop, further pushing up house prices.
8. sold 2 rent 1 said...
TR and David,
You may be right about IR not hitting 6%.
The falling GBP will see that inflation still remains a concern.
If rates start to fall again it will be because the economy is slowing.
When rates do fall there will be no surge in house prices this time.
HPs are being supported by BTL and city bonuses.
In 6 months time the stock market situation will be very different.
We are already seeing BTL landlords sell up and lenders tightening up their criteria.
9. David20040_0 said...
sold 2 rent 1, you are completely wrong, if IR drop of course house prices will pick up because borrowing will become cheaper, some of the economic proposals you post here make absolutely no sense.