Jump to content
House Price Crash Forum
Sign in to follow this  
Culpability Brown

Why A Rate Cut Was Inevitable

Recommended Posts

"With growth at an annual pace of 1.7%, British economic growth is at its weakest point in more than 12 years.

During the July Bank of England monetary policy committee meeting, some argued that the GDP revision suggested that output growth has been a little below trend for three quarters, implying a softer outlook going forward."

Based on the above and the fact that the big lenders had already acted the BOE had to realign the base rate with the markets inorder to maintain credibility.

The economy is clearly struggling.

I believe the UK's neutral rate to be within the range of 4.5 - 5.5% but dependent on further deterioration in the UK economy we need to wait to see where base rates go from here.

The US will raise rates next week bringing the US within 1% of the UK.

The dollar is falling so sterling is likely to struggle against the euro as opposed to the dollar.

The Autumn and Winter are notoriously quiet for the housing market and overpriced supply will continue it's rapid expansion.

Significant price falls remain the only thing that will re-ignite the housing market.

Stand-firm. It's a rocky road ahead for more than just property.

Edited by Culpability Brown

Share this post


Link to post
Share on other sites

I was reading something recently (think it was an old book on investing) which said that interest rates go down in a recession and up in a boom. Not sure how historically accurate that is...

Share this post


Link to post
Share on other sites
I believe the UK's neutral rate to be within the range of 4.5 - 5.5% but dependent on further deterioration in the UK economy we need to wait to see where base rates go from here.

Good post, and a contrast with the "rates have been cut so hurrah!" line being taken by most of the media.

Interest rates didn't reach the neutral level in this cycle, and yet the economy has managed to peak and turn around. The fact there is a need to cut rates at this point in the cycle should be a warning to everyone that the future might contain problems.

Share this post


Link to post
Share on other sites
CB that's not true everyehere i'm afraid

a search for resale homes on rightmove will reveal around 730 properties in total (including those SSTC awaiting completion) in my area (M20).  This number was nearly 780 a month ago.  A drop of 50 in a month is quite fast considering that some areas continue to see increase in stock [not in manchester but perhaps surrounding regions]

How do you know people haven't pulled their property from the market?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.