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B O E To Follow Fed And "ease"

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http://www.bloomberg.com/news/2010-09-22/boe-voted-8-1-to-hold-rates-as-officials-said-economy-may-need-more-help.html

BOE Signals Moving Closer to More Stimulus as Growth Slows

By Svenja O’Donnell - Sep 22, 2010 10:33 AM GMT+0100
Bank of England policy maker Andrew Sentance said, “We have to distinguish between unevenness of the rate of growth which we often get at this stage of the economic cycle and a genuine double-dip recession.” Photographer: Jason Alden/Bloomberg
The Bank of England signaled that policy makers are moving closer to adding more stimulus to the economy, joining the Federal Reserve in contemplating further bond purchases to revive a flagging recovery.

And the cuts haven't even started yet. September is almost over and the phoney war is about to end as we begin to pay for Brown's decade of folly.

On the ground: I just had a call from my local EA to ask me if I would like to make an appt now to see a house that has just been reduced from £360k to £295k. Its getting juicy around here.

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http://www.bloomberg.com/news/2010-09-22/boe-voted-8-1-to-hold-rates-as-officials-said-economy-may-need-more-help.html

BOE Signals Moving Closer to More Stimulus as Growth Slows

By Svenja O’Donnell - Sep 22, 2010 10:33 AM GMT+0100
Bank of England policy maker Andrew Sentance said, “We have to distinguish between unevenness of the rate of growth which we often get at this stage of the economic cycle and a genuine double-dip recession.” Photographer: Jason Alden/Bloomberg
The Bank of England signaled that policy makers are moving closer to adding more stimulus to the economy, joining the Federal Reserve in contemplating further bond purchases to revive a flagging recovery.

And the cuts haven't even started yet. September is almost over and the phoney war is about to end as we begin to pay for Brown's decade of folly.

On the ground: I just had a call from my local EA to ask me if I would like to make an appt now to see a house that has just been reduced from £360k to £295k. Its getting juicy around here.

Odd that Brighton is falling in this way seemingly ahead of many other parts of the UK.

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Up North here, between Liverpool & Southport we seeing MASSIVE cuts, signs with "Reduced by £25,000" on them........we at the tipping point. As i just said on one of the other threads i just reclaimed most of my tax from last year......think how many self-employed are doing the same!!!!

A MASSIVE new BLACK HOLE is appearing right before their eyes!

Mike

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still not sure how MORE money is going to create anything...surely the last lot of "help" produced a lot more public sector spending and not much else.

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Odd that Brighton is falling in this way seemingly ahead of many other parts of the UK.

Brighton is an even bigger bubble than London. House prices in Brighton and Hove hit 440% of their 1995 price in late 07/early 08, while London prices only got to 380% (Land Registry).

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still not sure how MORE money is going to create anything...surely the last lot of "help" produced a lot more public sector spending and not much else.

The last lot of QE enabled them to keep Gilt yields low, hence interest rates low in turn thus aiding bank profits and helping the supply of credit somewhat, giving some support to house prices through reduced numbers of forced sellers and more people than otherwise being able to get mortgages.

I can't see that this trick is going to underpin house prices for much longer. As the cost of living rises due to inflation, people are going to become less able to service the debt irrespective of crazy low base rates. They need to get inflation into people's pay packets if they want to erode the debt through the debasement of the currency.

Of course the people with the first access to the freshly created money (banks, financial institutions) love it as it means that they can grab a bigger share of the cake for themselves. The rest of us have to put up with our existing savings being devalued and a higher cost of living.

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Not sure they can ease anymore - the markets will kill the UK if it does - that's why you're hearing all this speculation about easing - nobody's got the nerve to do it, so they're kind of testing sentiment. They are incredibly worried about market reaction. Further QE will result in huge ramifications re: confidence, etc. And they knows it! If they do QE again, be very afraid.

Edited by gruffydd

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Is anyone else starting to sense a call for interest rate increases in the press?

People are starting to realise that actual inflation is even higher than the too high level they admit to.

I believe there will be a small symbolic interest rate rise soon, and when this happens the sh1t will really hit the fan HPC wise.

The moment the public realise rates will not stay low forever is when suddenly they will be "motivated" to sell.

Then it begins.

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The way I see it, the BofE has two choices (assuming we won't get much in the way of wage inflation which seems the consensus view):

1. Keep inflation high = less disposable income = downwards pressure on house prices

2. Raise base rates = see above

I think the phrase is 'between a rock and a hard place' ;)

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The last lot of QE enabled them to keep Gilt yields low, hence interest rates low in turn thus aiding bank profits and helping the supply of credit somewhat, giving some support to house prices through reduced numbers of forced sellers and more people than otherwise being able to get mortgages.

But it doesn't work does it... else they wouldn't need to do it again... and again and again

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Hang on a minute, weren't we suppose to be exporting our way out of recession. :lol::o

Now it seems we are going to be insulating our way out of recession. :lol::lol::lol:

http://www.guardian.co.uk/politics/2010/sep/21/huhne-green-jobs-economy-boost

"we can make big savings on bills, and use them to pay businesses for the cost of insulation. This is the green deal." - heh - heh - is that guy a rocket scientist. Of course, nobody should save the savings - they need to SPEND them! THIS IS AN ORDER!

Edited by gruffydd

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http://www.bloomberg.com/news/2010-09-22/boe-voted-8-1-to-hold-rates-as-officials-said-economy-may-need-more-help.html

BOE Signals Moving Closer to More Stimulus as Growth Slows

By Svenja O’Donnell - Sep 22, 2010 10:33 AM GMT+0100
Bank of England policy maker Andrew Sentance said, “We have to distinguish between unevenness of the rate of growth which we often get at this stage of the economic cycle and a genuine double-dip recession.” Photographer: Jason Alden/Bloomberg
The Bank of England signaled that policy makers are moving closer to adding more stimulus to the economy, joining the Federal Reserve in contemplating further bond purchases to revive a flagging recovery.

And the cuts haven't even started yet. September is almost over and the phoney war is about to end as we begin to pay for Brown's decade of folly.

On the ground: I just had a call from my local EA to ask me if I would like to make an appt now to see a house that has just been reduced from £360k to £295k. Its getting juicy around here.

These measures are to support our economy & have my full approval.

What else might I ask would work in these times.

S Levi

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But it doesn't work does it... else they wouldn't need to do it again... and again and again

You have to get into their mindset - if it doesn't work then you clearly aren't doing enough of it.

It did 'work' for a while - boosting markets, keeping interest rates lower than they otherwise would have been - but now the short term boost is wearing off. The next boost will also 'work', but wear off quicker. Time for a bigger one after that, then ... and again ... until they finally succeed in breaking the monetary system.

But on the plus side we'll all be millionaires by the endgame.

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I totally disagree with that statement. Without the last round of qe there would have been NO/MUCH MORE EXPENSIVE CREDIT.

Definitely successfully cemented house prices at bubble levels for the last 18 months.

EDIT: I should add they boosted stock, bond and commodity prices too.

thats fine, and I agree, it is another aspect...but....business wasnt taking the cheap credit....banks STILL arent lending enough, if you turn the position on its head..as they are.

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If he thinks the only problem was not cutting rates quickly enough, the man needs to see the bigger picture. This mess has been building for decades.

Making savings (bank credit and bonds) risk free, while manipulating rates from the top is simply flawed. Printing money is the consequence of not understanding this.

Edited by Traktion

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I'm sick and tired of these pillocks and their QE.

You work hard, save hard, live within your means and these @rseholes come along and steal from you (by stealth) by devaluing the currency your wealth is held in.

I've thought for a while that a currency is simply a container for ones wealth. Some containers are rubbish and full of holes (Sterling), some containers are really solid and safely hold whatever you put in them (Aussie). Times change and so do the containers, some at least. The Euro has gone from good to shit, to good and will no doubt go back to shit. Sterling however as remained rubbish.

The Pound seems to be pegged under both the Dollar and Euro at 1.60 and 1.20 respectively. As the Dollar and Euro become more and more worthless so does Sterling, since our currency cannot seem to break these barriers convincingly.

My gut feel is that it is now time to call it a day and exit Sterling altogether. With austerity cuts, a crumbling housing market and more QE on the way then we are surely screwed.

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My gut feel is that it is now time to call it a day and exit Sterling altogether. With austerity cuts, a crumbling housing market and more QE on the way then we are surely screwed.

Your best bet is to buy something that you actually want.

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Your best bet is to buy something that you actually want.

Agreed.

Everyone want's a house right, catch 22.

It's not the only thing people want though, right? :blink:

If Sterling is falling and houses are falling, why be keen to hold/buy either right now?

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Agreed.

It's not the only thing people want though, right? :blink:

If Sterling is falling and houses are falling, why be keen to hold/buy either right now?

I'm not keen, but i'm sitting in Sterling with a fund to buy a house. What else can you buy gold, another currency, shares.

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I'm not keen, but i'm sitting in Sterling with a fund to buy a house. What else can you buy gold, another currency, shares.

Buy a little bit of everything and you will be fine.

Edited by Alan B'Stard MP

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  • 201 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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