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Time to raise the rents.

Call For Another Ir Cut

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http://news.bbc.co.uk/1/hi/business/4133768.stm

Weather hits UK High Street sales

Traders on UK High Streets suffered their worst July in a decade as sales were affected by cooler weather.

The British Retail Consortium (BRC) said like-for-like sales were 1.9% lower than in 2004. Total sales, which include new stores, rose 2%.

However, the BRC said the effects on retail sales of the London bombings could have been worse.

It called for a further interest rate cut, following last week's reduction to 4.5%, to revive consumer confidence.

"While the recent cut in interest rates by the Bank of England's monetary policy committee is obviously welcome it will take several months for there to be any significant effect on consumer spending," said Kevin Hawkins, BRC director general.

"More cuts are needed between now and Christmas."

'Surprise figures'

The BRC said cooler, wetter weather meant trade in July was "much worse" than June. The 1.9% drop was also the biggest since July 1995.

Shoppers are still reluctant to spend on bigger purchases such as furniture, floor coverings and electrical products.

However, there had been some strong sales of clothes during the hotter days. There was also "generally good" growth in sales of food and drink at the start of the month, but again this fell away in the damper second half of July.

"The sales figures for July will come as a surprise to many," said Helen Dickinson, head of retail at consultancy KPMG, which helps to compile the monthly survey.

London shopping

Following the bombings of 7 July, and failed attacks on 21 July, there were initial drops in shopper footfall figures in the centre of London.

However, it appears the attacks did not hit sales figures as hard as first feared.

"Commentators and many retailers alike thought that the impact of events in London, coupled with a deteriorating trend throughout the year, could have been much worse," said Ms Dickinson.

Edited by Time to raise the rents.

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"More cuts are needed between now and Christmas."

Which shows you just how bad things really are. And you keep talking up property? Time to come down to planet earth, methinks. :D

Nomadd

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I heard on the radio this morning "retail sales figures were the worst since blah blah announced yesterday, the weather has been blamed along with interest rates"

I nearly spat out my coffee.

Why the hell should interest rates be blamed? Aren't we just above the lowest point in interest rates in 40 years?

What a debt monster we have created! It will consume us all!

I mean, when the radio says interest rates are to blame, with no qualification, people must say, yeah, rates are so high thats the problem. The real issue is that this boom has been fueled by low rates and lending has become quite frankly ridiculous.

Yet like an obese child who is eating more than ever, when the child is unhappy because its become too fat, the remedy is not to slim and get exercise, its to give it more chocolate and crisps.

This will only make the little git fatter and less healthy.

When will we stop pandering to the crying git?

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Which shows you just how bad things really are. And you keep talking up property? Time to come down to planet earth, methinks.  :D

Nomadd

only trouble is that imo the boe have lost their balls and will allow themselves to be pandered to by such organizations. expect much more wingeing over next couple of months and in all probability one more cut at least between now and xmas(ish) i have written to mervyn king this week to again make the point that why the hell did they not raise rates much earlier during the de-stabilising house price inflation bull run and also blindly ignore the connection between rising house prices and consumer spending(we could all see it ,why couldnt they) idiots....i do despair at the present time for monetery policy in this country but one thing i am sure of is that the game is up on rising house prices. but due to the banks ignorance and lack of foresight a problem that could have merely been a "blip" on the radar 5 years ago could well drag us into a much more serious economic situation....

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Guest Bart of Darkness
When will we stop pandering to the crying git?

Is that the debt monster or TTRTR?

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I don't know a great deal about economics BUT surely dropping interest rates will only encourage people to spend through borrowing yet MORE money. The UK economy has dug itself a huge hole - people have borrowed money and spend in the highstreet, new businesses and existing business have grown to fill this consumer frenzy, then people run out of ways to borrow and stop buyng and busnesses go pop. The UK shouldn't be encouraging people to borrow money they don't have to fund purchases of luxury items like furniture & holidays & meals out. It's madness and it just postpones the inevitable. Making the borrowing of money cheaper again is just akin to sticking your head in the sand.

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TTRTR,

I do not often direct any communication at you but I would ask you to look around.The retailers etc may be lobbying for more rate cuts but look what's happening in the world. The US are raising their rates today and oil is rocketing. There are larger more important things going on that will effect our economy than the Olympics and retail spending. If the BOE keep reducing rates not only will house prices crash regardless, because of the debt mountain , the currency that you are holding your property in will also crash. Remember with 1.1 trillion pounds worth of debt it is not the rate of interest people are struggling with, it's the initial principal sum that they can not cope with.

Edited by delite1

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I don't know a great deal about economics BUT surely dropping interest rates will only encourage people to spend through borrowing yet MORE money.  The UK economy has dug itself a huge hole - people have borrowed money and spend in the highstreet, new businesses and existing business have grown to fill this consumer frenzy, then people run out of ways to borrow and stop buyng and busnesses go pop.  The UK shouldn't be encouraging people to borrow money they don't have to fund purchases of luxury items like furniture & holidays & meals out.  It's madness and it just postpones the inevitable.  Making the borrowing of money cheaper again is just akin to sticking your head in the sand.

Spot on PF

We are in such dire straits at the moment with a credit bubble is that the historically low interest rates are too high to handle!

This isn't like a conventional recession in which people are saving and not spending, and interest rate cuts are used to change peoples behaviour, this is a situation where we are so bogged down in debt we cannot afford our repayments.

The economy is utterly exposed to even moderate rates and any delusion that encouraging people to borrow more will sort things out is a bit like being stuck in a deep hole in the ground and thinking - I know, I'll dig deeper, that'll help solve the problem!

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TTRTR

I cant believe you think this is good news....either you are blagging, seriously worried, completley stupid or mad?

Clearly as has been suggested time and time again here the economy is not in the best of shape energy prices are going through the roof and you seem to be of the opinion that IR has peaked and can only go one way.....down?

It looks to me like you are choosing to ignore all the evidence in front of your eyes but thats your call.....and I still cannot understand why you spend so much time on this forum if that is the case?

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TTRTR

I cant believe you think this is good news....either you are blagging, seriously worried, completley stupid or mad?

Clearly as has been suggested time and time again here the economy is not in the best of shape energy prices are going through the roof and you seem to be of the opinion that IR has peaked and can only go one way.....down?

It looks to me like you are choosing to ignore all the evidence in front of your eyes but thats your call.....and I still cannot understand why you spend so much time on this forum if that is the case?

I wonder if Brown will blame the recession on the fact energy costs have rocketed? Or maybe because our weather was so bad this year!!! How can you blame the worst retail sales probably ever on the fact that the sun did not shine!!!

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Why the hell should interest rates be blamed? Aren't we just above the lowest point in interest rates in 40 years?

The retailers are the biggest bunch of Interest Rate whingers ever, even more so than the Estate Agents.

It's probably the case that the property industry doesn't whinge quite as much as the retailers about Interest Rates because it would be a tacit admission from them that the housing market is in trouble, whereas the retailers can be more "honest".

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TTRTR,

I do not often direct any communication at you but I would ask you to look around.The retailers etc may be lobbying for more rate cuts but look what's happening in the world. The US are raising their rates today and oil is rocketing. There are larger more important things going on that will effect our economy than the Olympics and retail spending. If the BOE keep reducing rates not only will house prices crash regardless, because of the debt mountain , the currency that you are holding your property in will also crash. Remember with 1.1 trillion pounds worth of debt it is not the rate of interest people are struggling with, it's the initial principal sum that they can not cope with.

We've shown each other we're poles apart on our opinions in the past.

You are entitled to yours & me to mine. But please stop telling me about U.S. rates, I've heared it all before. Tell the newbies about it, it's what keeps them going.

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TTRTR

I cant believe you think this is good news....either you are blagging, seriously worried, completley stupid or mad?

Clearly as has been suggested time and time again here the economy is not in the best of shape energy prices are going through the roof and you seem to be of the opinion that IR has peaked and can only go one way.....down?

It looks to me like you are choosing to ignore all the evidence in front of your eyes but thats your call.....and I still cannot understand why you spend so much time on this forum if that is the case?

The evidence is that wage growth is faster than inflation. People have more to spend than they've ever had.

Let them spend it on consumption rather that feeding money up to pensioners with cash in the bank (and STR's :D ).

Consumption and investment are what keeps us all busy, long let it go on.....

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Just keep staring firmly at the tip of your nose TTRTR. And, if someone puts forward a reasoned & educated arguement that you can't find a reply to you can always simply retort with some pathetic ill-conceived 'insult' - afterall, that's much simpler than actually switching your brain on, removing your blinkers & defending your corner :rolleyes:

And as for wage growth, are you mad! Wages, certainly in my industry, are falling drastically. I am paying my printers 60% of what they were earning 5-10 years ago. Office staff & Management, once on £40,000+ p.a. are now happy to earn £28,000. How do you justify the fact that the "average wage" can in no way these days buy you anything near the "average house". Nothing tallies. People are paying the price now for borrowing all that money - every 20 & 30-something I know is crippled with debt repayments. They have no savings, minimal equity in their houses and are keeping their heads just above water. Either you don't get to speak to many 'real' people or see much of the 'real world' or you are living a lie :blink:

Edited by Pink Flamingo

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TTRTR, how can you talk about wage growth being higher than inflation and then expect interest rates to remain low?

So now we have higher wage inflation, oil inflation and all that brings, high commodities inflation because of China etc.

Where does it end?

Have we found a perfect nivana where we can just strip out everything from RPI that is inflationary, and then just throw away decades of economic history and carry on like nothing could possibly go wrong?

I am just curious why you can talk about inflationary issues in the context of low interest rates, when actually more saving and less borrowing needs to be encouraged to keep the economy going.

I think you just don't have any big picture views on life whatsoever! :blink:

Sometimes I would love to live in your world, it must be so much more comforting than this nasty real one, where cause and effect takes place constantly.

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I saw an article this morning somewhere entitled 'BOE Jumped too soon' - making the case that IRs should not have been dropped and the next move will be up.

What do economists now?

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I saw an article this morning somewhere entitled 'BOE Jumped too soon' - making the case that IRs should not have been dropped and the next move will be up.

What do economists now?

Well they are so clever they know that bad weather is keeping the consumer out of the shops. I thought it was the fact houseprices have stopped rising, people have stopped mewing and now there getting scared to spend spend spend. But hey, I am not an economist so I must be talking out my a*se!!!!

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The evidence is that wage growth is faster than inflation. People have more to spend than they've ever had.

Let them spend it on consumption rather that feeding money up to pensioners with cash in the bank (and STR's  :D  ).

Consumption and investment are what keeps us all busy, long let it go on.....

TTRTR

Trust me I am not trying to force my opinion down your throat and I don,t think your stupid either but I am worried at the debt levels incurred and think that the majority of people in the country do not realise exactly what they do spend and what the implication of oweing a couple of hundred grand potentially could be.

Anyway enough of that....what about your Bret Lee hes in hospital with an infection and Glen McGrath is crocked also I think our Freddie is coming to get you...... :o

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Consumption and investment are what keeps us all busy, long let it go on.....

Quite.

Consumption:

Fuelled by a credit card binge on imported goods.

Investment:

Into unproductive bricks and mortar to purchase a massive and illusory 'premium' on the real utility value of property.

How do you suppose an economy can survive on this financial model? How much better if all the money which has been sucked into the property bubble was applied instead to investment in new technologies and productive enterprises which create real jobs and real earnings for the UK.

Edited by Red Baron

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Well they are so clever they know that bad weather is keeping the consumer out of the shops. I thought it was the fact houseprices have stopped rising, people have stopped mewing and now there getting scared to spend spend spend. But hey, I am not an economist so I must be talking out my a*se!!!!

What bad weather are they referring to? We've had a good summer in the South, we even have a hose pipe ban.

Is the weather too hot - keeping people out of the shops? Or too wet and nasty - keeping people out of the shops? Do people not go to the shops in the winter? What about the January sales, now traditionallly held in November?

Boy, talk about clutching at straws.

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TTRTR, how can you talk about wage growth being higher than inflation and then expect interest rates to remain low?

So now we have higher wage inflation, oil inflation and all that brings, high commodities inflation because of China etc.

Where does it end?

Have we found a perfect nivana where we can just strip out everything from RPI that is inflationary, and then just throw away decades of economic history and carry on like nothing could possibly go wrong?

I am just curious why you can talk about inflationary issues in the context of low interest rates, when actually more saving and less borrowing needs to be encouraged to keep the economy going.

I think you just don't have any big picture views on life whatsoever! :blink:

Sometimes I would love to live in your world, it must be so much more comforting than this nasty real one, where cause and effect takes place constantly.

Am I missing something Gavin?

Wage inflation has been higher than general inflation for many years. People are far better off because of it, there is no disputing that.

You say more saving is needed......I agree, the more that is saved, the lower rates will go to make use of this excess capital. Savings need to be invested to get a return. It's not a magic machine where you feed in the capital & it grows on sunshine alone. That capital needs to be planted somewhere to grow.

Savers are planting money in my hands to grow it for them. All I ask is for a stable environment where I can expect inflation to continue to erode the debt away. I am satisfied at most rates of erosion.

If savers want more for their money, they will either have to give me more inflation, or they'll have to find somewhere else to send their money, speculation of their own maybe?

It's not that hard mate, it's how the world in which we live works. It will stop working if the formula isn't right & I am supremely confident that the people employed to keep it running will do a fairly good job of it. That's how I can sleep easily at night, knowing how I support these savers.

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TTRTR

I cant believe you think this is good news....either you are blagging, seriously worried, completley stupid or mad?

Clearly as has been suggested time and time again here the economy is not in the best of shape energy prices are going through the roof and you seem to be of the opinion that IR has peaked and can only go one way.....down?

It looks to me like you are choosing to ignore all the evidence in front of your eyes but thats your call.....and I still cannot understand why you spend so much time on this forum if that is the case?

IMO energy price inflation is more likely to be a drag on other parts of the economy.

I just went out to lunch & was thinking of going for a drive to some shops not that far away, but the cost of petrol passed through my mind & I decided not to because I didn't have anything I definitely needed to buy.

I then wondered if thats going on all over the world. People deciding not to shop or do other things because of the cost of getting there in the first place.

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  • 302 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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