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Interest Rate Cuts

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Retail sales fell less than expected in July

Thu Aug 18, 2005 11:17 AM BST

LONDON (Reuters) - Retail sales fell less than expected in July after a sharp jump in June, official figures showed on Thursday, suggesting consumer spending may be stabilising.

The Office for National Statistics said sales fell by 0.3 percent on the month in July after a downwardly-revised 1.2 percent gain in June. Analysts had predicted a fall of 0.6 percent.

This took the annual rate of expansion to 1.8 percent from 1.2 percent in June and the ONS said underlying growth in retail sales was on a gradual upward trend.

http://today.reuters.co.uk/news/newsArticl...NOMY-RETAIL.xml

Well that has to be the final nail in the coffin for further interest rate cuts :D

Next move has to be up :lol:

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Retail sales fell less than expected in July

Thu Aug 18, 2005 11:17 AM BST

   

LONDON (Reuters) - Retail sales fell less than expected in July after a sharp jump in June, official figures showed on Thursday, suggesting consumer spending may be stabilising.

The Office for National Statistics said sales fell by 0.3 percent on the month in July after a downwardly-revised 1.2 percent gain in June. Analysts had predicted a fall of 0.6 percent.

This took the annual rate of expansion to 1.8 percent from 1.2 percent in June and the ONS said underlying growth in retail sales was on a gradual upward trend.

http://today.reuters.co.uk/news/newsArticl...NOMY-RETAIL.xml

Well that has to be the final nail in the coffin for further interest rate cuts :D

Next move has to be up :lol:

But when? And by how much?

Have the UK public now got used to a level of approx 4.5% (+/- 0.5%)??

Would a rise back to 4.75% in say November and a 2nd increase to 5% in June 2006 really be that hard to cope with?

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But when? And by how much?

Have the UK public now got used to a level of approx 4.5% (+/- 0.5%)??

Would a rise back to 4.75% in say November and a 2nd increase to 5% in June 2006 really be that hard to cope with?

I think the answer to this is Yes.

The impact of 4.75% rates had hit many much harder than expected.

More generally I think the problems lie with credit card debt fatigue as many of the 0% interest rate periods have now expired.

Many cheap homebuyer rate and short term fixed mortgage rates have also expired.

What a mess frankly!

Much worse to come and quicker than many expect.

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The problem is that there remains cheap deals for interest rates on mortgages and personal loans, and credit cards.

Anyone coming out of a cheap rate, can simply jump back into another.

I suspect that when rates go up this gate will be closed, then it will be curtains.

The other problem is that many of the young FTB'ers coming into the market place arrive with astronomical personal debts built up from years of irresponsible spending and a lack of financial knowhow.

Uni Fees are part of the problem but also the culture of must have it now pay later is going to get a rude awakening.

This was not at play in the last recession, and it is going to have a dire impact on young people making a start in life.

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The problem is that there remains cheap deals for interest rates on mortgages and personal loans, and credit cards.

Anyone coming out of a cheap rate, can simply jump back into another.

I suspect that when rates go up this gate will be closed, then it will be curtains.

The other problem is that many of the young FTB'ers coming into the market place arrive with astronomical personal debts built up from years of irresponsible spending and a lack of financial knowhow.

Uni Fees are part of the problem but also the culture of must have it now pay later is going to get a rude awakening.

This was not at play in the last recession, and it is going to have a dire impact on young people making a start in life.

They can jump into another one but only after shelling out on a large arrangement fee first.

Often this eradicates any benefit of the fix.

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They can jump into another one but only after shelling out on a large arrangement fee first.

Often this eradicates any benefit of the fix.

That's true, particuarly when you consider that many of the 'good' deals are only available to those who want an 80% mortgage.

That basically means most people who have taken out a mortgage in the last 1-2 years won't be able to apply.

Edited by gilf

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I think the answer to this is Yes.

The impact of 4.75% rates had hit many much harder than expected.

But did it?

From the point where rates hit 4.75%, as a nation we have borrowed a further £100Billion or increased our debt by 10%. Does that look like the sign of people holding back?

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As far as I'm concerned, the current events are perfect to lead onto another rate cut.

Sterling has appreciated and a possible future cut has lost its certainty. Exactly the conditions in which people hold fire & wait & see.

Also exactly the reason why another cut would be needed. It won't become apparent overnight of course.

The funny thing to me is that all the bear arguments have been reversed, but you still argue in the same way. Last week for example all were on about sterling weakening & importing inflation, but now that argument is out the window.

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Money today is cheap, very very cheap.

I am afraid that if you are a budding FTB'er and not aware that todays rates are a gift then you are going to get a very very big shock in the future.

The charges to setup a new fixed rate mortgage are negligable in fact most are free.

Money remains in abundance and banks are happy to lend it out on current T&C's.

I suspect the money supply will tighten in a couple of years but for today it looks like the spending and the borrowing is going to continue.

From what I can see those who own property have borrowed very cheaply to finance their additional expenditure such as cars, holiday.

However those with unsecured debt always pay much much more in interest rates as those in rented are considered much higher risk.

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Money today is cheap, very very cheap.

I am afraid that if you are a budding FTB'er and not aware that todays rates are a gift then you are going to get a very very big shock in the future.

This where people are going wrong,

If money is 'cheap' it should be a time to overpay your mortgage and not to over stretch overself with debt, if it's cheap historically then soon or later its gonna be more expensive

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Guest Time 2 raise Interest Rates
Yes, but what was it last week?  :P

Last week wednesday 10 aug 05 $1.7970 and at the beginning of the year it was trading at about $1.95. Oils gone up 40% in the meantime. It all looks pretty inflationary to me. But then, I'm not banking on interest rates to fall just to keep solvent. :D

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As far as I'm concerned, the current events are perfect to lead onto another rate cut.

Sterling has appreciated and a possible future cut has lost its certainty. Exactly the conditions in which people hold fire & wait & see.

Also exactly the reason why another cut would be needed. It won't become apparent overnight of course.

The funny thing to me is that all the bear arguments have been reversed, but you still argue in the same way. Last week for example all were on about sterling weakening & importing inflation, but now that argument is out the window.

Of cause inflation has jumped so maybe the bears were right.

The way I see it is that we have a tug of war between Gordon and his cronies, BRC and CBI etc who are bleating for rate cuts and the economists who realise rates are too low.

Who will win? Well the bleaters have just scored a point. However, inflation has jumped, petrol prices are starting to hurt and retail sales aren't as bad as thought. The BofE look a bit stupid, Merv has saved face and all bets are off.

I'm not going to call interest rates, but all I can say is that I'm glad I'm not very vulnerable to them.

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Interesting peice in the Telegraph yesterday.

Tim Congdon lambasts the decision to reduce rates and insists they must rise. Roger Bootle, though surprised, states that he expects rates to continue falling as inflation is only a temporary blip.

2 eminent economists - who to believe?

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Guest Riser
Interesting peice in the Telegraph yesterday.

Tim Congdon lambasts the decision to reduce rates and insists they must rise. Roger Bootle, though surprised, states that he expects rates to continue falling as inflation is only a temporary blip.

2 eminent economists - who to believe?

I suspect we will see rates on hold until around October then possibly one more cut in a desperate attempt to de-fibulate the economy then a series of increases to around 6% as the chase rampant inflation an stop the pound falling on foreign exchanges.

House price inflation will go negative around October and we will start to see wider price falls, the Spring rise will fail next spring and by next Christmas we should see HPI at its peak of around -15 to 20%

That is why I see Blair stepping down in the next couple of months due to medical reasons ie stress and Brown appointing some fall guy who he can blame for the mess along with "external factors" such as rising oil prices.

Quote of the day "If you laid all the economists in the world out end to end they still wouldn't reach a conclusion"

Edited by Riser

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Will will have to wait till next month to see if Gordon and Tony lower the rates again.

I suspect Gordon will drop interest rates a little further to bolster up the economy through spending.

The brilliance behind spending is that the more you spend, the more revenue you raise.

B&Q invented the notion with the B&Q Spend and Save card, Gordon was so impressed he bought into it and has not looked back.

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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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