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Rise In Interest Rates Would Be A 'disaster' For Uk Economy, Warns Peter Hargreaves

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http://www.telegraph.co.uk/finance/economics/interestrates/7975870/Rise-in-interest-rates-would-be-a-disaster-for-UK-economy-warns-Peter-Hargreaves.html

Mr Hargreaves, who is stepping down as chief executive, warned that any attempt to increase interest rates would be "disastrous" for the UK economy and would lead to a wave of repossession as many people simply gave up paying their mortgages.

"There are an awful lot of people just about financing mortgages on homes in negative equity because of low interest rates. However, if mortgage payments were to rise above rental costs repossessions could become a big problem," said Mr Hargreaves, who is one of Britain's wealthiest men with a fortune of nearly £600m.

Wow how comes no one else has predicted this.

Still it's another bearish headline highlighting the policy problems our idiot leaders have got themselves into.

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http://www.telegraph...Hargreaves.html

Wow how comes no one else has predicted this.

Still it's another bearish headline highlighting the policy problems our idiot leaders have got themselves into.

Bad for the overstretched....who need to be releived of their burden anyway, yet great for savers, who will be able to spend again.

Course, house prices would fall, and people buying them will have more money in their pockets...to spend in the economy rather than to banks.

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Bad for the overstretched....who need to be releived of their burden anyway, yet great for savers, who will be able to spend again.

Course, house prices would fall, and people buying them will have more money in their pockets...to spend in the economy rather than to banks.

You're being sarcastic, right?

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Rents are much lower than interest payments on a fixed rate. Only those who got lucky on short term or lifetime trackers with no collar can make this claim. And they can't move/renew without the banks correcting this accident they got caught short on.

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Bad for the overstretched....who need to be releived of their burden anyway, yet great for savers, who will be able to spend again.

Course, house prices would fall, and people buying them will have more money in their pockets...to spend in the economy rather than to banks.

In a normal world that would be the case, but we have the added issue of defaulting home owners causing the spectre of another bank crisis as more holes appear in their balance sheets. Either savers lose there actual savings when the banks collapse, or QE is used to bailout the banks again, thereby damaging the value of sterling and losing savers money that way. Sterling holders lose all ways.

If only there was a sure fire way to protect savings...

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may be because as mortgage brokers they could be recommending loads of variable & tracker types deals, any increase means their clients are truely in the proverbial dodo, which means they could be in it.

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The longer that rates are held artificially low, the more people get 'used' to these rates and ignore the consequences of them rising. I've no doubt that some are being clever about it and using this opportunity to pay off debt but I have a feeling that many more are overstretching themselves and have no protection against rates rising again.

The policy seems to have been designed to give as much rope as possible only for people to hang themselves.

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Bad for the overstretched....who need to be releived of their burden anyway, yet great for savers, who will be able to spend again.

Course, house prices would fall, and people buying them will have more money in their pockets...to spend in the economy rather than to banks.

hmm....surely savers don't actually spend, they being savers, as it were... :blink:

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hmm....surely savers don't actually spend, they being savers, as it were... :blink:

savers would spend some of their savings if they were not concerned about inflation out distancing the return they get on said savings and therefore having to dip into said savings to pay for the essential cost of living. :(

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In a normal world that would be the case, but we have the added issue of defaulting home owners causing the spectre of another bank crisis as more holes appear in their balance sheets. Either savers lose there actual savings when the banks collapse, or QE is used to bailout the banks again, thereby damaging the value of sterling and losing savers money that way. Sterling holders lose all ways.

If only there was a sure fire way to protect savings...

Bank crisis? we have way too many bankers....closing half wouldnt see a dent in the loans they can make....and they cant make them because people are PAYING IT DOWN.

THATS why rates are low...to stimulate lending....but they are pushing on a string and stopping the flow of cash because savers are spending less.

And Savers are a major force in the economy.

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Bank crisis? we have way too many bankers....closing half wouldnt see a dent in the loans they can make....and they cant make them because people are PAYING IT DOWN.

THATS why rates are low...to stimulate lending....but they are pushing on a string and stopping the flow of cash because savers are spending less.

And Savers are a major force in the economy.

Fixed incomers currently have zero income so don't spend - velocity.

Maybe they will have to sell some assets or maybe they were the ones buying BTLs to maintain an income.

Higher interest rates will increase velocity but distress debt.

The recent buyers with their larger deposits have probably strengthened the banks balance sheets ready for a further fall.

Oh the irony. I presume its the boomers.

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Fixed incomers currently have zero income so don't spend - velocity.

Maybe they will have to sell some assets or maybe they were the ones buying BTLs to maintain an income.

Higher interest rates will increase velocity but distress debt.

The recent buyers with their larger deposits have probably strengthened the banks balance sheets ready for a further fall.

Oh the irony. I presume its the boomers.

have you tried to get a loan from a bank recently...that ISNT a mortgage?

Rates are not 2.5% for normal borrowing.

its 13-35% for revolving credit, plus fees, its base Plus 8% at least for business loans to small business.

credit isnt cheap....cash isnt sellable for normal people....and rates for pensioners are diabolical at the moment...but dont worry, people who are earning can support them

Money spent on housing is money spent with the banks....we need money spent on things we make and produce wealth....even new houses appear to be selling only with taxpayer help.

No, Increase rates, cut asset prices and lets spend on things other than repairing the broken window.

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have you tried to get a loan from a bank recently...that ISNT a mortgage?

Rates are not 2.5% for normal borrowing.

its 13-35% for revolving credit, plus fees, its base Plus 8% at least for business loans to small business.

credit isnt cheap....cash isnt sellable for normal people....and rates for pensioners are diabolical at the moment...but dont worry, people who are earning can support them

Money spent on housing is money spent with the banks....we need money spent on things we make and produce wealth....even new houses appear to be selling only with taxpayer help.

No, Increase rates, cut asset prices and lets spend on things other than repairing the broken window.

Don't get me wrong I agree but the central bankers don't and as long as they can get away with it they will.

They'll keep rates down long after their phoney inflation indicator has taken off.

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Don't get me wrong I agree but the central bankers don't and as long as they can get away with it they will.

They'll keep rates down long after their phoney inflation indicator has taken off.

for central bankers, the economy IS the banks.

cant see a few mates going on JSA, now can we.

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http://www.telegraph.co.uk/finance/economics/interestrates/7975870/Rise-in-interest-rates-would-be-a-disaster-for-UK-economy-warns-Peter-Hargreaves.html

Err loads of people predicted this. My own feeling isthat we may never see rates more than 1 percent again unless we have significant wage inflation

Wow how comes no one else has predicted this.

Still it's another bearish headline highlighting the policy problems our idiot leaders have got themselves into.

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Bank crisis? we have way too many bankers....closing half wouldnt see a dent in the loans they can make....and they cant make them because people are PAYING IT DOWN.

THATS why rates are low...to stimulate lending....but they are pushing on a string and stopping the flow of cash because savers are spending less.

And Savers are a major force in the economy.

wrong . Look at japan . Savers are a weak force in the economy. Borrowers arethe major force.

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wrong . Look at japan . Savers are a weak force in the economy. Borrowers arethe major force.

im not interested in Japan.

Savers here save for SPENDING in their retirement.

They are cutting into their capital so are scrimpy.

Net lending is falling for mortgages....in spite of the low rates...MEW is just about gone....borrowers will be a spent force....as they must be mathematically at some stage.

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So we have to run the whole economy on some make believe fantasy that the average house value is 160-200K even though the only way of supporting this is to lend people money that they can never repay, thereby collapsing the banks and government finances repeatedly, again and again. It's absolutely shocking that responsible people are advocating this.

Why not just pretend that RBS shares are still worth 600p. I know people are only willing to pay 46p for them at present, but, hell, no one needs to sell them at that knock down prce when they are worth 6 quid each. That makes the government stake worth................well, a lot. That means they can borrow more, not less, create more public sector jobs, increase pay. If we go on ignoring reality everything will be just fine.

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The longer that rates are held artificially low, the more people get 'used' to these rates and ignore the consequences of them rising.

Yes, there are many who really think they can not go up

The recent buyers with their larger deposits have probably strengthened the banks balance sheets ready for a further fall.

Yes, exactly as planed. A period of deleveraging the banks before they are forced to let the market take its course. Can they keep rates down for long enough? I thought around 2 years ago that a 5 year deleveraging period would be necessary to prevent mass bank failures although I realize interest rates cant be forced down much longer there is a reliance that inflation will help this deleveraging further. But will it all be enough?

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if mortgage payments were to rise above rental costs repossessions could become a big problem,"

I'm in awe of such a revelation <_<

Am I even worthy to be on the same planet as PH?

Yes, that it is a rhetorical question

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im not interested in Japan.

Savers here save for SPENDING in their retirement.

They are cutting into their capital so are scrimpy.

Net lending is falling for mortgages....in spite of the low rates...MEW is just about gone....borrowers will be a spent force....as they must be mathematically at some stage.

what do you think japanese savers save for?

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  • 145 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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