Monday, Sep 17, 2007
Pound drops as Northen Rock woes continue
Financial Times: Business Article
Well don't say we didn't predict this. Who needs David Smith's site?
(New) Labour = high interest rates and devaluation.
I am not so sure that one should vote Tory now, these characters should be forced to clear this up... isn't there a saying rather like cats' faeces and noses?
Posted by orwell @ 03:01 PM (554 views) Add Comment
10 Comments
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1. Alan said...
I think the economy has suffered a severe body blow.
Sept 17 (Reuters) 3.24pm -The sterling trade-weighted index sank to its lowest in about a year on Monday, as troubles at one of the UK's largest mortgage lenders backed the view that UK interest rates have peaked and may even need to be cut.
No surprise the pound is bobbing beneath $2.00 ! Look at our exchange rate to the Euro.
2. enuii said...
Inflation here we come - so what about interest rates (up/down)?
3. David 20040_0 said...
It looks like PM Crash Gordon is in the unenviable position of having house price defaltion and consumer and wage inflation on the cards. Now how did he manage that?
4. Orwell said...
Thanks for the information Alan,
What's your take on Sterling then?
5. sovietuk said...
THE BASKET CASE ECONOMY
6. Orwell said...
They will try to cut rates I agree...
That would be madness though in today's inflationary economy (4-6% by most people's reckonings).
7. C'mon Correction said...
Enuii - my bets are still on rates going up. Inflation will be imported more and more, a lot of global prices have yet to be affected by base rates rising around the world eg. China and india, their exports won't show the full effect until next year. We have massive pent-up inflation in this country. Only a depression will cause rates to be lower in a few years than they are now.
8. harold said...
I've been saying that the £ is pants for over a year now, and have been astonished how it has defied gravity for so long. What's particularly interesting about this is that the BoE (who are looking for any excuse to cut rates to support their friends in the City) are in a corner: either they cut and wave bye bye to their beloved fiat currency, or hold fast and possibly raise and see a full-scale collapse in property prices.
Actually, either scenario will lead to deflation in the property sector; cutting rates, however, would simply delay it by a few months IMHO.
9. whiteknight said...
Thesis starts:
You can go to countries in Asia and still live like a Lord at current currency conversion rates.
They have fanstastic technology, are innovative and aggressive and dont think they are entitled.
When we can drag ourselves from the wine bars and coffee shops we ponce around selling old houses to each other and boasting about how much they are worth.
Currency revaluations are on the horizon.
Thesis ends.
10. wiltshire said...
It's hellishly tricky trying to guess which direction they'll move in isn't it? Christmas is just around the corner too and any further interest rate rises now could scare a lot of people away from the high streets.
Maybe they'll just play it safe and hold them. I wouldn't like to be on the MPC and trying to judge city vs house prices, Christmas vs debt mountain, inflated boom vs inevitable hard/soft (?) landing. What they should do is what they should have done a long long long looooooooooooooooong time ago and dish out the medicine. It ain't gonna taste nice but it'll do us all some good.