Tuesday, Jun 12, 2007
"But what about my mortgage , its under water??"
dailymail: Families warned to brace themselves for ANOTHER interest rates rise
Britain's top banker has warned families to brace themselves for further interest rate rises.
Bank of England Governor Mervyn King said an alarming number of economic indicators - including property price rises - remained "elevated
Posted by dangerous trading @ 03:56 AM (125 views) Add Comment
7 Comments
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1. Orwell said...
Mr King said he fears many will be unable to cope with another rate rise because they have taken on excessive debts. But the risks of ignoring an overheating economy were too great for the Bank to ignore.
WELL PEOPLE HAVE BEEN WARNED I SUPPOSE!
King's remarks will be grim news for families whose budgets are already stretched to the limit by the highest borrowing costs since 2001.
Another increase would push the share of income absorbed by interest payments to its highest level since 1992 - when the country was struggling with recession. Mr King observed pointedly that traders in financial markets now expect rates to reach 6 per cent.
I REMEMBER IT WELL! I
Mr King said borrowers must be far more restrained - many families are blithely ignoring the danger of higher borrowing costs when they take out loans to buy houses.
OR THE FINANCIAL SERVICES 'INDUSTRY' HAVE GIVEN THEM THE IMPRESSION IT DOESN'T MATTER? WHO IS TO BLAME REALLY?
The governor said: "In light of the greater availability of credit, any person or family that borrows at a variable rate should recognise that the interest rate they will pay in the future may vary.
WELL WITH RESPECT ISN'T THAT SOMETHING THEY SHOULD BE TOLD QUITE CATEGORICALLY WHEN THEY TAKE OUT THESE AGREEMENTS?
Annual repayments on a standard variable rate mortgage of £150,000 - now the national average - have already leaped by £1,150 over the past year, according to figures from the Halifax. A rise to 5.75 per cent would add nearly £300 more.
I JUST DON'T UNDERSTAND:
1. WHERE DO PEOPLE GET THE MONEY?
2. WHY HASN'T THERE BEEN MELTDOWN ALREADY?
Mr King said the Bank has a number of concerns about the economy. Factories and High Street retailers have been aggressively increasing the prices they charge their customers, which could further exacerbate inflation.
WELL WE KNOW THAT THIS IS THE FAULT OF THE GOVT. ANYWAY BY THEIR AGRESSIVE PLANNING AND BUSINESS REGULATION TOWARDS SMALL BUSINESS AND TOTAL RELAXATION TOWARDS TESCO AND THE LIKES - THIS OF COURSE DOESN'T CREATE MONOPOLY CHARGING POWER DOES IT-LOOK AT FOOD AND DETERGENTS?
Growth in bank lending and in the amount of money sloshing around the economy is at its highest since 1990 - further adding to inflation worries.
SWERVYN MERVYN HAS BEEN WARNED- A 13% INCREASE IN THE MONEY SUPPLY SINCE 2001 SOMEONE SAID - IS THIS RIGHT? WHERE HAS IT GONE?
Mr King said world gross domestic product was rising at its fastest pace since the late 1960s, helping to prop up "much stronger" economic expansion.
BUT IF WE ARE 167% OF GDP IN DEBT, ISN'T IT JUST GOING IN MORE DEBT?
In the UK, expectations of future movements in inflation have also "drifted up". That is a concern, said Mr King, because it may lead people to demand higher wages.
NOT LIKE THE POSTIES THEN? AND REMEMBER THE UNIONS IN THE CALLAGHAN ERA? "I CAN'T CONTROL MY MEMBERS!" THAT WAS FUN! IN FACT COMING TO THINK OF IT POLITICS WAS FUN THEN!
Most economists expect lower gas and electricity bills to pull inflation down in the coming months. The next set of official figures is due today. But this is of little comfort, Mr King said, because there is "underlying upward pressure on inflation".
He added: "There is no simple or self-evident answer to the question of what path of interest rates will be necessary to bring inflation back to the 2 per cent target and keep it there."
YES THERE IS SWERVE, HIGHER INTEREST RATES AND / OR TAXATION MATE! (THE TWO FISCAL LEVERS-YOU'VE LOST ALL THE REST (LIKE THE NATIONALISED INDUSTRIES GIVING WAGE DISCIPLINE ETC).
The Royal Institution of Chartered Surveyors has warned that an increase in the base rate to 6per cent could have a profound impact on the housing market.
BUT IT LOOKS LIKE IT WILL HAPPEN AS WE PREDICTED - PROBABLY AUGUST AS I SAID WHEN THE CITY/COURTS/PARLIAMENT ETC. ARE AT SLEEP!
Senior RICS economist David Stubbs, said: "If interest rates were to rise to 6 per cent before the end of the year, a sharper slowdown and a difficult 2008 would be on the cards."
WELL DAVID, SORRY BUT ITS HIGH TIME MY FRIEND!
2. mattpascoe said...
Firstly my brother said there would be NO IR rises, then he said there would be NO more IR rises, wrong on both counts. Inflation is still way over the 2% target, market fueled by greed.
3. sovietuk said...
Payback time. Jobs created by debt fuelled consumerism and out of control public spending. Unfortunately there are no free lunches so when the waiter brings the bill - pay up.
4. denzil said...
I don't have a lot of sympathy for King or the MPC. They have continually adopted a "wait and see" policy when prudence through rate rises was the correct course IMHO.
All "wait and see" is doing is potentially destabablising the economy whilst delaying the inevitable.
The current governor and the MPC are burying their heads in the sand and hoping inflation will just go away.
5. fahrenheit451 said...
Oh, my sympathy really extends to Mr King and his cronies, but even GB(H) has less sympathy for his incompetence.
So they're frightend that a little rise to 6% will be bad for all those with huge debts (that's the BTL buddies) I suppose. Roll on interest rates of 7%, they're meant to be managing a Democratic Economy, not some theoretical watered down Communist Economy (oh sorry, we are talking about the Labour Party aka "New Labour"). Ever wondered what happened to the Far Left. Now, why are they no wingeing, what do they know that we, your average Joe Bloggs, do not. This smaks ever so much of New Russia, the rich got richer and the poor got poorer.
"I remember when" interest rates were 10% and rising ...
6. Orwell said...
Ditto
A bit of shock therapy never did anyone any harm!!!
7. Van Hoogstraten said...
New Zealand now has interest rates of 8% and their economy hasnt crashed - there's plenty of scope for increases if the BoE are serious about tackling inflation