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David Cameron Hints At Interest Rate Rise To Combat 'worrying' Inflation

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http://www.telegraph.co.uk/finance/economics/7779794/David-Cameron-hints-at-interest-rate-rise-to-combat-worrying-inflation.html

"We have seen a slightly worrying increase in inflation in recent months, so interest rates will be set to control inflation," he said.

We'll get our 15% IRs..........but not for long time. First it's deflation and only when QE and stimuli have been exhausted do they fire up the choppers to combat hyper-inflation. I'm talking c.2016 but until then it's bridges, roads, rail to nowhere.

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http://www.telegraph.co.uk/finance/economics/7779794/David-Cameron-hints-at-interest-rate-rise-to-combat-worrying-inflation.html

"We have seen a slightly worrying increase in inflation in recent months, so interest rates will be set to control inflation," he said.

Short term interest rates should be set at something like long term inflation expectations plus 1.5%.

Even if the BoE's central forecast of inflation at 2% is correct, the base rate should be at 3.5% rather than 0.5%.

I expect that David Cameron and friends are giving the BoE a signal that it is acceptable for them to raise rates to to a more normal level given the inflation outlook than the current 0.5%.

He is effectively saying that the BoE is more independant than it was under labour (sorry they don't deserve a capital L). In the long run, this is good for the UK as credibility is being restored. In the short run, it will inflict more pain on the reckless and probably result in a transfer of wealth back to the prudent.

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I would welcome an interest rate rise, like most savers

but, as a would be FTB and having saved dementedly for a house over the last 15 years so that I could buy one outright, I think that, unless houseprices drop 50% in my area, an interest rate rise would just keep me 'out of the housing market' by providing an income so that I could rent quite happily. Rents are cheap compared to prices and so yields are very low where I live.

Would an IR rise therefore help a readjustment in prices by providing 'an income' to people like me, just as much as affecting mortgage affordability. I cannot be alone in my situation.

Having rented for so long I don't really see the need to own a house, and realistic interest rates would give me financial independence for a while until houses become affordable.

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and not before time.given they are going to need the prudent to underwrite the reconstruction,it's seems logical to try and stop them moving to the other side of the equation before it's too late.

Agreed.

At some point, domestic capital is going to be required to rebuild from this disaster.

Choosing to erode capital through implicit inflation seems to be the current, very poor choice, especially if domestic capital chooses to move offshore before it is "too late".

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Agreed.

At some point, domestic capital is going to be required to rebuild from this disaster.

Choosing to erode capital through implicit inflation seems to be the current, very poor choice, especially if domestic capital chooses to move offshore before it is "too late".

It maybe the wrong choice but it is also the path of least resistance so they'll chose this one, they just have to be careful not to tip it into hyper.

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It maybe the wrong choice but it is also the path of least resistance so they'll chose this one, they just have to be careful not to tip it into hyper.

That has been their plan so far.

Given everything that has happened since about 1965, I am not convinced that the owners of capital are going to trust "them" to finesse the last 5 minutes of the game when they have failed abjectly in the first 75 minutes (sorry, a rugby guy rather than a footie guy hence my game is 80 minutes long rather than 90).

Capital flight is probably at least as large a risk as the ultimate inflation outcome.

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Capital flight is probably at least as large a risk as the ultimate inflation outcome.

Way ahead of you there already, I've noticed a lot of people complaining the 500 Euro notes are no longer used, as they were a fantastic means to smuggle massive amounts of money out the country.

There was a worrying trend in January 2010 when I was in HK a lot of traders of currency there no longer considered UK£ to be hard currency anymore.

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http://www.telegraph.co.uk/finance/economics/7779794/David-Cameron-hints-at-interest-rate-rise-to-combat-worrying-inflation.html

"We have seen a slightly worrying increase in inflation in recent months, so interest rates will be set to control inflation," he said.

Same story different spin.

http://www.heraldscotland.com/business/markets-economy/pm-s-fear-despite-king-s-plan-to-hold-on-1.1031200

Cameron’s comments appear much more hawkish than those of Mervyn King, Governor of the Bank of England.

King has signalled the Bank’s Monetary Policy Committee is happy :) to hold UK base rates at an all-time low

of 0.5% for an extended period.

King has hammered home his view that the recent spike in inflation is temporary and that the large amount

of spare capacity opened up in the UK economy by deep recession will pull inflation down in the medium term.

It's gonna be low for some time yet... don't kid yourselves. :(

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Way ahead of you there already, I've noticed a lot of people complaining the 500 Euro notes are no longer used, as they were a fantastic means to smuggle massive amounts of money out the country.

There was a worrying trend in January 2010 when I was in HK a lot of traders of currency there no longer considered UK£ to be hard currency anymore.

The ultimate "hot money" is this country is the wealth of the non-doms who live here. I doubt that many of them hold much more than their relatively short term transactional requirements in Sterling.

I have admitted here that I am a beneficiary of the non-dom regime in this country. Ideologically, I am opposed to the regime as it is not fair (one of the few times that I use the word fair) to the local population.

I expect that the resolution of the non-dom tax regime in this country in the next budget or two will give us a massive signal with respect to the level of fear about capital flight within the new government.

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This will lead to even more empty properties as rich people just "park them" until CGT goes back down.

Part of me wonders if this is the real intention - save the property market from crashing by discouraging a few million BTL landlords from all selling at once.

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This will lead to even more empty properties as rich people just "park them" until CGT goes back down.

Part of me wonders if this is the real intention - save the property market from crashing by discouraging a few million BTL landlords from all selling at once.

If rich people had bought most of the properties on the market since about 2001/2, I would agree with you.

Rich people understand value and yield and have been very patient during this most recent bubble.

I expect that people who want to be rich but aren't have bought most of the property on the market since 2001/2 using a lot of borrowed money.

They are being squeezed from all sides and will face increasing pressure to puke their properties back out onto the market.

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Guest The Relaxation Suite

This will lead to even more empty properties as rich people just "park them" until CGT goes back down.

I doubt it will go down. Lowering it to 18% was a highly irresponsible act of pouring petrol on the fire of house price inflation at the end of a dying government. Returning to a sensible rate with taper relief is not only ethical but also demonstrates a more realistic understanding of the housng situation in Britain, a country practically destroyed by greed in the property sector.

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This will lead to even more empty properties as rich people just "park them" until CGT goes back down.

Part of me wonders if this is the real intention - save the property market from crashing by discouraging a few million BTL landlords from all selling at once.

More silly shite. Yes "rich people" will sit on property, but a few million BTL landlords are not "rich people" are they? They are people in need of a good underwear laundry.

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More silly shite. Yes "rich people" will sit on property, but a few million BTL landlords are not "rich people" are they? They are people in need of a good underwear laundry.

They (BTL amateurs) are overdue it. The Krusty generation have had their chance, that's the way I see it. There's no money left to fund champagne socialism (a sickening era it was too), everyone will benefit from their comeuppance. I can see the sickness of socialism coming to an end at last. I feel happy in my skin with the new government so far - lets hope they deliver.

And to deliver, for me, all they need do is bring back things to equilibrium - average long term property price multiples (following a lengthy slump), average long term interest rates returning to benefit the stricken savers, average BTL slumlords being exposed for the chancers they are. It'll swing beyond the average before it rebalances, that's to be expected. And all in all, good for society as a whole. There will be losers, but these are mainly the imprudent. It's bust - not long before the true optimal time to actually buy property B)

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They (BTL amateurs) are overdue it. The Krusty generation have had their chance, that's the way I see it. There's no money left to fund champagne socialism (a sickening era it was too), everyone will benefit from their comeuppance. I can see the sickness of socialism coming to an end at last. I feel happy in my skin with the new government so far - lets hope they deliver.

And to deliver, for me, all they need do is bring back things to equilibrium - average long term property price multiples (following a lengthy slump), average long term interest rates returning to benefit the stricken savers, average BTL slumlords being exposed for the chancers they are. It'll swing beyond the average before it rebalances, that's to be expected. And all in all, good for society as a whole. There will be losers, but these are mainly the imprudent. It's bust - not long before the true optimal time to actually buy property cool.gif

I agree, it`s going to swing hard to the downside, but that will be good for society in the long term. Bring on a massive f*ucking crash, the uk sheeple need to be kicked out of their celeb fantasies.

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  • 259 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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