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VacantPossession

Quarter Of One Percent....ha!

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Some forum members may have read a seemingly flippant post of mine recently alluding to Mervyn King's "Haircut" rather than Interest rate "cut". I was making a serious point.

The idea that a quarter of one percent adjustment can do ANYTHING whatosoever to "kick start" an economy which has enormous numbers of other influences upon it, is ludicrous.

The BOE does not want to kick start anything. In fact if they had any sense at all they would want to raise interest rates to curtail the debt and housing madness that is going on at the moment. A quarter percent is surely there to offer VI's a limp olive branch.

The bank is clearly frightened of unleashing yet another HPI period but they are also paranoid that "industry" will whine if they didn't make this tiny gesture towards them.

So what do they do: Pretend they are "doing" something which in fact is about as significant as Mervyn King having a quarter of one inch lopped of his hair length.

If the BOE and the government really wants to do something about housing, debt and flakey service industries predicated on a wing and a prayer, and reliant as they are on "consumer confidence" , they've got to start tninking about addressing the ease with which house owners have made tax-free enormous profits, in many cases resulting in more cash than they ever would have gained by actually WORKING.

The BOE has demonstrated that pathetic adjustments in interest rates is "playing" at being sensible while actually being completely irresponsible. They should have seen the current housing insanity coming YEARS ago, when they could have done something about it. Now things are out of hand, and nothing the Bank or GB does is going to stop an enormous crash. It will come sooner or later.

VP

Edited by VacantPossession

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The BOE does not want to kick start anything. In fact if they had any sense at all they would want to raise interest rates to curtail the debt and housing madness that is going on at the moment. A quarter percent is surely there to offer VI's a limp olive branch.

The bank is clearly frightened of unleashing yet another HPI period but they are also paranoid that "industry" will whine if they didn't make this tiny gesture towards them.

So what do they do: Pretend they are "doing" something which in fact is about as significant as Mervyn King having a quarter of one inch lopped of his hair length.

If the BOE and the government really wants to do something about housing, debt and flakey service industries predicated on a wing and a prayer, and reliant as they are on "consumer confidence" , they've got to start tninking about addressing the ease with which house owners have made tax-free enormous profits, in many cases resulting in more cash than they ever would have gained by actually WORKING.

The BOE has demonstrated that pathetic adjustments in interest rates is "playing" at being sensible while actually being completely irresponsible. They should have seen the current housing insanity coming YEARS ago, when they could have done something about it. Now things are out of hand, and nothing the Bank or GB does is going to stop an enormous crash. It will come sooner or later.

VP

What I dont' understand is that they put up rates to 4.75% to try and dampen the demand for debt and cool the house prices and yet since rates went to 4.75% as a country we now owe another £100Billion or 10% more so really the rates going to 4.75% wasn't enough, it didn't stop us borrowing. Yes it stopped house prices going up anymore and a mild slowdown on the high street but it didn't stop borrowing. IRs didn't go high enough and now the BoE has given in to the bleatings of businesses that are making record profits and the greedy b@stard banks and EAs that want property prices to go on rising forever.

Makes me ******* mad

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I completely agree. The BOE aren't helping this country, they are delaying any pain. Yes the pain of raising IR's would be uncomfortable for people, but the pain in the long run by delaying the IR rises will make people pass out.

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I wouldn't just write it off. It's all about sending a message that IRs have peaked for the moment. It will very likley have a supporting effect on retail and the housing market, and if not then you can be sure they'll drop IRs again.

Property Crash = Retail Crash = Recession. Final analysis you might want a crash but they don't and they'll do everything they can to prevent one.

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Guest Charlie The Tramp

I have a strong feeling that Lomax crossed the floor reversing the vote from last month.

What are the odds that the decision was unanimous? I would say 100/1

When the minutes are published I predict the following members still voted for a hold.

King

Large

Tucker

Lambert

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I wouldn't just write it off. It's all about sending a message that IRs have peaked for the moment. It will very likley have a supporting effect on retail and the housing market, and if not then you can be sure they'll drop IRs again.

Property Crash = Retail Crash = Recession. Final analysis you might want a crash but they don't and they'll do everything they can to prevent one.

It's funny how they think they can do anything to avoid a crash. I mean rates at 4.75% slowed everything down but because everything (housing in particular) is so expensive as a country we've still borrowed another £100Billion. We are a nation addicted to debt. I bet the members of the BoE don't really think they can do anything, I'm sure they sit around every month at a table, with heads in their hands at the pointlessness of their lives.

I agree though, I think we will see the usual pattern played out, HPC then higher unemployment then recession.

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Guest Time 2 raise Interest Rates

BUSINESS LONDON STANDARD.

Nick Verdi at Barclays Capital believes today's cut will prove a one-off, with RATES

STARTING TO RISE AGAIN NEXT MAY.

"Looking at the economic data on balance, we don't think the Bank NEEDED TO ACT." he said. "And it certainly shouldn't rush into a flurry of cuts which would encourage people to start piling debt on their credit cards again"

But the bulls know best. :P

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Guest Riser
Property Crash = Retail Crash = Recession. Final analysis you might want a crash but they don't and they'll do everything they can to prevent one.

All interest rate cuts do is cause ripples on the waves that are the housing market. The current wave is starting to crash on the beach and no amount of cuts are going to change that.

Now the housing market has turned, further rate cuts will simply alert the public to the weakness of the economy and weaken sentiment yet further.

The BBC said that this cut was designed to get people out in the high street and spending, in this consumer boom it has become more important for us to spend money we don't have rather than have positive balance of payments and a healthy manufacturing base. We can't go on spending forever B)

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The experiment has failed, basically.

Thatcher's economy allowed excessive consumer borrowing....

result .... boom-and-bust.

Gordon Brown *says* he will stop boom-and-bust..

but he still allows excessive consumer (and fiscal)

borrowing...

result....boom-and-bust.

Fiddling with IR's is not strong enough.

When will they get at the heart of boom-and-bust and

curtail unrealistic borrowing ???

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When will they get at the heart of boom-and-bust and curtail unrealistic borrowing ???

When they decide they don't want to get re-elected.

Unfortunately we live in a country where people are convinced it's their right to get rich by borrowing money. Until there's an economic catastrophe that brings some reality back into people's lives, they'll keep voting for low interest rates and high house prices.

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I almost feel sorry for the poor saps on the BOE committee.

On another thread someone said that the people on the committee should be respected because they know more about economics than us poor mortals etc etc.

Well I think that is bolleaux. If economics was simple why do we stagger from crisis to crisis? Not now and again but throughout history - boom - bust - crash - rising unemployment - inflation - deflation - stagnation - stagflation - if economics was a matter of experience and common sense why can't the economy be run better?

I suppose the simple answer is the global economy keeps changing and we need to adapt to it and this is where you need a bit of savvy.

Dropping interest rates to a 50 year low was a big mistake and it was done to avoid a recession. To me it was clear it was a mistake straight away. All that happened was that borrowing increased - consumer spending increased paid for with borrowed money.

Do you need to be a genius economist of many years experience to know you cannot keep borrowing forever? Do the idiots on the BOE MPC really think that we can borrow our way out of an inevitable correction in our economy? Thatcher used to refer to us paying ourselves too much. We still do. We rely on printed money that has not been earnt to keep our economy afloat.

The dollar base rate rises - ours begins to fall. Our currency will go down and the idiots at the BOE will have to put IRs back up again - making themselves look stupid. They know there is no way out of this. The borrowing has to stop. Inflation must be contained. IRs need to go up.

And they will. Another thing the Thatcher years taught us - 'you can't buck the market' - but the idiots at the BOE think you can.

Sooner or later the rest of the world will look at Britain and think - if I sell them my gizmos - how much is a British pound worth? How can I work it out? A council in Nottingham advertises for someone to run their street-naming department (I kid you not) and pays them pro-rata 19k a year. Now I am a Chinese manufacturer and I think - wow 19k - I can pay 10 workers for that money. The British sure think a lot of their currency - but I don't - so I want more for the goods I export there - I am going to put my prices up. I can't see where the value is in the British pound - what do they make? how can I compare? they don't make anything but they pay themselves lots of British pounds so one of them can work for the council while the other one works in a service industry.

It's all coming soon - high inflation, high interest rates and a full-blown recession.

The BOE have just lost whatever shred of credibility they had.

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If economics was simple why do we stagger from crisis to crisis?

Economics _is_ simple. Here's what the first two years of an economics degree should consist of:

'You can't beat the market'.

And here's the third year:

'Well, you can, but only in the short-term and interference will almost always be worse in the long term'.

The rest of the three years you could just doss around, because those are the only two things you really need to know.

The problem with economics is that economists think they can not only understand the market but also do better. In reality a market is so complex that they can't even understand it, let alone improve it in the long term.

Edited by MarkG

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It's all coming soon - high inflation, high interest rates and a full-blown recession.

The BOE have just lost whatever shred of credibility they had.

Could not agree more, i reckon the average working man or woman in the UK is too busy working long hours for the miniumum wage to work out what is going on.

How they are being conned by the Big Bullshitting Jock.

When the future problems caused by the MPC rises to the surface, someone will have the blame at their door, and guess what, B and B will be whiter than white.

Merv the Swerv, or should it be Serv, will get the blame.

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I have a strong feeling that Lomax crossed the floor reversing the vote from last month.

What are the odds that the decision was unanimous? I would say 100/1

When the minutes are published I predict the following members still voted for a hold.

King

Large

Tucker

Lambert

Agree, 4 of Gordon's patsy's and Bean who couldn't recognise a bubble in a sodastream voted for a cut to push it through 5-4.

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Guest Bart of Darkness
I'm sure they sit around every month at a table, with heads in their hands at the pointlessness of their lives.

:lol: That cheered me up a bit.

Do they make the decision in the first 5 minutes and then spend the next day or so drinking tea and eating bourbon creams? (can't make economics look too easy y'know old boy)

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I think Panda is right most people seem blissfully unaware of any kind of problem with the economy.

In fact most still think of the economy as Nu Labours strong point !!

When will reality bite ?

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All the posts above sound like sour grapes to me, because you all got it wrong on IRs.

BoE targets inflation first and financial stability 2nd. They will use the lowest IRs possible in acheiving this - their job is NOT to cause financial stress to the over borrowed, no matter how much the people on here wish it to be so.

Get used to it, low IRs are here to stay for a long time, and that probably means high house prices are here to stay for a long time too.

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All the posts above sound like sour grapes to me, because you all got it wrong on IRs.

Most of us expected a cut: that doesn't make it any less retarded when it happened. I think we have every right to be upset that the government values irresponsible borrowing over saving and investing.

BoE targets inflation first and financial stability 2nd.

If they target inflation, what were they doing when they let house prices triple over the last few years?

Get used to it, low IRs are here to stay for a long time

Possibly. That's why I'm about to shift a lot of money out of the UK, to countries that value financial stability over house price inflation.

hat probably means high house prices are here to stay for a long time too.

How is a 0.25% cut going to make houses affordable for FTBs?

Short of Brown going completely mad and forcing the BoE to cut rates to 2-3%, the housing market is still stuffed.

Edited by MarkG

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All the posts above sound like sour grapes to me, because you all got it wrong on IRs.

BoE targets inflation first and financial stability 2nd. They will use the lowest IRs possible in acheiving this - their job is NOT to cause financial stress to the over borrowed, no matter how much the people on here wish it to be so.

Get used to it, low IRs are here to stay for a long time, and that probably means high house prices are here to stay for a long time too.

Oky Doky :ph34r:

The Yanks will put pay to that scenario :P

5.25% this time next year :o

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  • 336 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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