Thursday, Mar 27, 2008
Express in non-ramping story shocker
Daily Express: More misery looming for homeowners
HOME owners were warned of more mortgage rate misery ahead by the boss of the Bank of England yesterday.
Governor Mervyn King feared lenders will continue to refuse to pass on interest rate cuts to borrowers.
At the same time, he dropped a big hint that the Bank base rate could be cut again by 0.25 per cent next month.
But he admitted mortgage holders were unlikely to see their repayments slashed with banks desperate to recoup cash in the “credit crunch.”
It means homeowners cannot expect any respite amid crippling rises in the cost of living and taxation.
And they were warned that house prices are unlikely to rise significantly “for years.”
Meanwhile LIBOR rose to 6%, the highest since December.
Posted by little professor @ 07:27 AM (501 views) Add Comment
9 Comments
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1. Mikelivingstone said...
>> He told them: “I would be surprised in a few years if house prices are markedly higher than they are now. House prices should be more in line with average earnings.”
Translated: Expect house prices to actually fall, as earnings are going to take a long time to reach a levels capable of sustaining all that mortgage debt.
2. Landedgentry said...
Great, so don't bother cutting rates Mervyn.
3. shipbuilder said...
Mervyn has admitted that cutting the BofE rate has made no difference - cost of mortgages is up, LIBOR is up. So why keep cutting and undermining the pound?
4. Johnycldears said...
Is it me or has Eric Pebble had rather a lot to say in the comments section ?
5. mark said...
let em crash and burn, it will do us good in the long term.... after all banks wouldnt bail out real businesses....... so why should the BOE help banks? they are businesses and after our money for profit gain, why cry when things are bad, let it all crash....
6. layers said...
SB - I suspect that the only levers that the BoE have at their disposal is interest rate changes and issuing money, with the effect of lowering the former and increasing the latter only results in inflation and the weakening of GBP. Another effect is that the debt owed by the UK becomes less relatively over time. It's a very poor strategy.
However, another result of devaluing the pound is that we Euro-sceptic Brits, may start to embrace the Euro as our currency once GBP follows the dollar - I wonder then, if in the midst of a major UK recession, we will finally have the 'Referendum'?
7. uncle tom said...
Our Merv's general message over the last few weeks has pointed towards a nil change in interest rates for now, with a possibility that the next change might be upward.
But in a one word answer to a question yesterday, he gave the impression that another cut was likely.
- I'm wondering if he meant to say that?
8. M4nclad said...
The express most worst case for schizophrenia I've seen in my life. It jumps around from stories saying that house values are to rise to £1m in the next 5 years storys of doom and gloom.
I wonder if the regular readers of the express actually ever notice these anomolies? -
9. Gone To Colombia said...
Cutting rates by the BoE whilst knowing that the banks will not cut the rate for borrowers is a simple way of adding to their profit. A simple way of making us pay for their mistakes.