Thursday, Sep 13, 2007
Why cutting rates to save housing is a bad precedent
FT.com: House price slowdown hits sterling
"[...] evidence of UK economic weakness, particularly in the housing market, has potential to trigger expectations of UK interest rate cuts and consequent sterling weakness,” said Adrian Schmidt at Royal Bank of Scotland.
“While the Bank of England is not going to cut UK rates just because the housing market flattens out, the turn in momentum of UK house prices will get the market thinking that way.”
Posted by dohousescrashinthewoods @ 01:33 PM (582 views) Add Comment
3 Comments
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1. lvmreader said...
In defence of currency
Buckle up folks!
2. Alan said...
I think the FT commentator has a vested interest.
Could it be that the RBS is concerned to keep prices rising? This will help them to market yet more loans to those who still have equity in their houses and want another new car/long haul holiday that they can't really afford.
Decisions on IRs are based across a much broader spectrum than house prices.
3. enuii said...
£ backed into a corner with nowhere to go courtesy of NeuLiebor and Crash Gordon.