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majorwilliammartin

Policy Worker At Boe

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I am a fairly regular poster on housepricecrash.co.uk, but as this is moderately sensitive information, I'm not going to post under my normal alias. Apologies for the secrecy, but I wouldn't want to identify my "source".

At a do yesterday I was chatting to a guy who works at the BoE. He was a lovely chap, and very happy to give me his informed opinions. Been there for several years, he even has a subsidised mortgage with them!

We chatted for a quite a while; he was genuinely impressed at how much I knew about monetary policy, which is a testament to the educational usefulness of this site (I have learnt more or less everything I know about economics from housepricecrash.co.uk).

The main topic of conversation was debt. He agreed that it was certainly a matter of concern, but that there were no big shocks or recession predicted, which I was surprised by. As a bear, it did get me thinking "oh dear, have I got this wrong".

But then he made some interesting comments. He had previously been working on monetary policy, but had moved over to "financial stability" (or "financial instability", depending on how you looked at it). While this is an ongoing review, it was clear that there were risks for the economy, and he hinted that we were in uncharted territory. What shocked me was his frank admission that people were assumed by the BoE to act rationally; he recognised that this was a pretty major assumption, but regrettably there were few other places they could start from!

When I piped up about housing, he was not a doommonger, but did acknowledge that buying now was a risk for a FTB; he wouldn't be able to buy his own flat now. He definitely recommended having a go at putting in silly offers, i.e. asking for 20% off asking price.

Sorry it's nothing very concrete, but I found it interesting.

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If there is nothing negative on the horizon why are the BOE considering dumping interst rates in the face of rapidly rising US rates when we still have historically very low rates which are still accomodative and we have rapidly increasing debt public and gov debt?

Financial stability my ****, it is the BOE's forgotton remit, ever since it became "independant".

:angry:

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BTW, he thought that pretty much everyone on the MPC was appointed by GB, one way or the other, but also thought that he wasn't all that familiar with the appointment process. He thought the whole thing was very vague.

Edited by majorwilliammartin

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BTW, he thought that pretty much everyone on the MPC was appointed by GB, one way or the other, but also thought that he wasn't all that familiar with the appointment process. He thought the whole thing was very vague.

I think just 4 are directly appointed, I bet there's a couple in the MPC who are actually pulling their hair out, especially Andrew Large who is responsible for financial stability - if Brown's block vote effectively votes for reduced rates whatever the risk then I wouldn't be surprised to see him jump ship before the doodoo hits the fan. You only need the 4 block voters and 1 compliant non-directly appointed member to have complete control over rate decisions.

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Guest consa

"I am a fairly regular poster on housepricecrash.co.uk"

How come this was your second post? do you mean reader? :blink:

The BOE don't know what they are doing, there heart says we have historically low rates and they should return to neutral level, but they don't know what the neutral level is!!

GB tells them rates need lowering to boost HPI to get the economy going, 0.25% lower, wooohooo that wil help, NOT!! it will just make everyone more nervous, it will not wipe out the massive debt pile, personal or government.

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"I am a fairly regular poster on housepricecrash.co.uk"

How come this was your second post? do you mean reader? :blink:

The BOE don't know what they are doing, there heart says we have historically low rates and they should return to neutral level, but they don't know what the neutral level is!!

GB tells them rates need lowering to boost HPI to get the economy going, 0.25% lower, wooohooo that wil help, NOT!! it will just make everyone more nervous, it will not wipe out the massive debt pile, personal or government.

Because he took on a new name. Doh!

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I spent Saturday afternoon necking a few jars with the investment director of a major fund management group.

He told me how he is renting a place with a rental yield of a little over 3% - sold 18 months ago to change jobs (and relocate) and decided not to bother buying.

He said he would wait until people started to accept "silly offers".

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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