Thursday, Sep 10, 2009
No change, no increase in QE
BBC 'News': UK interest rates remain on hold
And no mention of any negative interest rate lunacy.
Posted by paul @ 12:06 PM (1532 views) Add Comment
13 Comments
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1. mrflibble said...
No increase in QE - I'm impressed.
It makes a refreshing change to have a MPC decision that hasn't resulted in our currency getting kicked to death...
2. Smug Punter said...
@ Mrdribble- It makes a refreshing change to have a MPC decision that hasn't resulted in our currency getting kicked to death...
its nice to know you care, dribble
3. bystander said...
.....or the market celebrating more cheap money.
4. 51ck-6-51x said...
Paul
- You keep implying a negative interest rate is mad; well it would be if the rate in question were the base rate ( overnight lending from the central bank )
However, it is not the base rate they would be making negative ( which would be insane, since what economic agent in their right mind would refuse the opportunity to be paid for taking out a loan?! ), it would be the deposit rate ( hence charging banks for hoarding at the central bank ). There was no deposit rate @ the BoE until 2006 I believe, I'm sure you can confirm @ their website, but I hve little time today.
5. mark wadsworth said...
What 666 says. The much vaunted 0.5% rate is the deposit rate, not the much higher lending rate.
Yet again, Halifax releases house price index on morning of MPC announcement. That there would be no reduction seemed pretty certain, as Halifax reported yet another increase.
6. Jayk said...
You do realise that putting single or double quotation marks either side of news in BBC News makes you look like a crank?
7. uncle tom said...
It's becoming less relevant now - an index showing actual mortgage rates would be more interesting..
8. timmy t said...
I agree with Uncle Tom - a couple of years ago every rate decision was posted on here and debated all day - todays announcement is struggling to get any reaction. Nobody even expects a rate change, its more about how much cash they're printing. Which just goes to show what a mess we're in.
9. bellwether said...
Actually mortgage rates are going up. Just heard of 2 people with decent income getting 6% with a 15% deposit.
Slightly off topic a frustration here in Bellwether Acres is the lack of repos. It's repos that really drive HPC, lots of houses at auction driving down the price that an agent can put on a property the next time he values it, but while there are plenty of people in arrears we aint to getting them. This worries me.
10. paul said...
@666
Nowadays, interest rates are no longer adequate a tool to cope, and various other untried and untested schemes are being devised with scant regard for the consequences.
Interest rates above 2% have been perfectly adequate through 350 years of booms and busts, see? So my reference to 'lunacy' was in recognition of the increasing wackiness of the methods being deployed.
Do you know what the ultimate outcome of negative overnight rates or quantitative easing will be? Neither do they.
@Jayk
Welcome to housepricecrash.co.uk. The quotes are an oblique refernence to the BBC's tendency to overuse or simply abuse quotation marks in their headlines. No other media source does it.
Here's an example of how the BBC abuses quotation marks:
News Corporation's James Murdoch has said that a 'dominant' BBC threatens independent journalism in the UK
Murdoch attack on 'dominant' BBC
Now, can you tell me why they've used quotes other than to attempt to discredit Murdoch's assertion? After all, the whole clause is reported speech - surely it should read News Corporation's James Murdoch has said that "a dominant BBC threatens independent journalism in the UK".
Unfortunately, this is not an isolated example, so please excuse my joke at the BBC's expense. Don't worry if you don't see the irony - not everyone will get it.
11. flashman said...
Bellwether: Yes, re the lack of repos, you have hit the nail on the head. I've said it many times and I must stop saying it because it's even boring me ... but the only factor that will cause repo numbers to surge is sufficient unemployment numbers. If unemployment approaches or goes over the 3 million mark, then we will get what we want. I am certain of this. Higher interest rates will certainly help but that is secondary.
Incidentally, I had a long conversation with one of the development land specialists that I have cultivated. He told me that there is a big pick up in demand for building plots. He volunteered the information that most of his clients stopped building for a while but they are back in force now because they do not know how to do anything else. They either develop or sit at home doing nothing. It's a bit like a dead mans’ beard and fingernails, still growing. I haven't fully assimilated this information but I somehow know it’s important. Maybe some buyers are still operating on the dead mans hair and nails principle?
12. Chris said...
'If unemployment approaches or goes over the 3 million mark, then we will get what we want. I am certain of this. Higher interest rates will certainly help but that is secondary.' ........said Flashman.
If unemployment goes over 3 million but the banks under government pressure either hang onto the repossessed properties or take an incredibly lenient attitude towards mortgage defaulters, or both, then it may not happen quite the way you think. Wasn't someone on here yesterday talking about all the properties he keeps seeing that have overgrown gardens but are not on the market? Are these properties the banks have repossessed but are sitting on trying to engineer price rises through restricting supply? How long can they wait before the prices have risen and they can begin to dripfeed the properties onto the market?
Restricting the number of repossessions (interest rates and legislation) and the number of repossessed properties coming onto the market (by pressuring the banks you now own) at one time is key to the government preventing house price falls and restarting their ponzi scheme.
13. smugdog said...
THEY ARE NOT ON HOLD. THEY ARE NOW FIXED UNTIL THE ELECTION. THE NEW GOV WILL NOT WISH TO ALTER OR AMEND FOR A LONG WHILE AFTER.