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pete.hpc

Interest Rates Could Stay Low For 3 Years

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100% certain and guaranteed.

Merv cannot and will not hike because everything hangs on house prices. And I do mean EVERYTHING.

One hike and the market will go into a catstrophic freefall and there is no way Sir Merv is going to allow that to happen. he has done the right thing with the shit he has been given by Brown to work with.

Remember Merv called it a few years ago: " house prices are a matter of opinion but debt is real."

Pity Gordon didn't listen.

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Indeed, Sir Bruce at long last, that's one headline they got right.

Nice to see that, to see that nice

Cuddly toy! Teasmade!

Didn't he do well? ;)

Edited by MrPin

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Ah, yet another article whose author can magically see into the future. Remember just a few months ago everyone suddenly went from expecting no IR hike to expecting one in May and now back to not expecting one. A couple of news about even higher inflation or increased output and it'll be all change again.

I always say it's impossible to predict IRs more than 6 months in advance - anyone who makes claims based on 3 years is a fool.

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I always say it's impossible to predict IRs more than 6 months in advance - anyone who makes claims based on 3 years is a fool.

Probably why a 25 year financial deal seems a bit dodgy at the moment!

In truth, we are indeed in times of change. :o

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100% certain and guaranteed.

Merv cannot and will not hike because everything hangs on house prices. And I do mean EVERYTHING.

One hike and the market will go into a catstrophic freefall and there is no way Sir Merv is going to allow that to happen. he has done the right thing with the shit he has been given by Brown to work with.

Remember Merv called it a few years ago: " house prices are a matter of opinion but debt is real."

Pity Gordon didn't listen.

I dont think the BOE rate matter that much any more, if they were to raise the rate from 0.5 to 2 in one go I cant see it speeding up the crash at all, I base this on the fact that most people I speak to are on fixed rates. Anyway they are being reactionary not proactive and they wont raise rates untill we are downgraded and they have to - in which case they can and will blame it on the debt problem and being downgraded.

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Is there a song about kicking a can down the road? Cannot think of one off hand but it would suit current policy down to the ground.

The current financial system is one giant ponzi scheme with governments of the world forcing their taxpayers to be the last sucker in.

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I dont think the BOE rate matter that much any more, if they were to raise the rate from 0.5 to 2 in one go I cant see it speeding up the crash at all, I base this on the fact that most people I speak to are on fixed rates. Anyway they are being reactionary not proactive and they wont raise rates untill we are downgraded and they have to - in which case they can and will blame it on the debt problem and being downgraded.

http://www.mortgagerates123.co.uk/mortgage_news_blog/2011/03/09/uk-has-more-variable-rate-mortgages-than-fixed-mortgages/

According to a new report carried out by Legal & General Investment Management firm around 90% of all mortgages in the UK are set on a variable rate which is a much higher rate than most analysts have predicted.

:o:o:o

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If interest rates stay low we can expect to see

  • a continuing drop in the purchasing power of the pound
  • Strong price inflation with low wage inflation
  • People's standard of living steadily falling
  • Foreign investors buying our housing stock; hopefully starting businesses too

In this way I suspect that house prices can be maintained at just a little below current levels. People's living standards will continue to drop to pay for this, The upside is that the British economy regains competitiveness, and we start to see an upsurge in manufacturing. So not all bad news, but it's going to take years of austerity/stagnation. Anyone seriously wanting to buy property at a low price, maybe should be thinking of going abroad, where prices are crashing (Spain) / have crashed (US) .

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Well best hope wage inflation starts to catch up then.

:lol:

While there are currently 50+ applications for most jobs, and any shortfall can be met by advertising the job in EU countries, then I can't see wage inflation taking off soon.

Incidentally wage inflation probably would provoke a rise in interest rates (not the only thing that would). So it's not certain that we can survive 3 years without having to raise rates.

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If interest rates stay low we can expect to see

  • a continuing drop in the purchasing power of the pound

  • Strong price inflation with low wage inflation

  • People's standard of living steadily falling

  • Foreign investors buying our housing stock; hopefully starting businesses too

In this way I suspect that house prices can be maintained at just a little below current levels. People's living standards will continue to drop to pay for this, The upside is that the British economy regains competitiveness, and we start to see an upsurge in manufacturing. So not all bad news, but it's going to take years of austerity/stagnation. Anyone seriously wanting to buy property at a low price, maybe should be thinking of going abroad, where prices are crashing (Spain) / have crashed (US) .

There will be no upsurge in manufacturing - it hasn't stopped leaving yet. Investing in an over indebted, housing bubble flushe economy - only those loooking to cream a bit off city wages and costs (which themselves will spur the export of functions higher and higer up the scale to lower cost countries and trading zones).

Meanwhole for the rest of the population - ever rising living costs will eventually crippled their discretionary expenditure - which it has already started to do.

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Cheaper loans to stay can only mean one thing falling capital values. So for homeowners it is a two edged sword.

The market is on the brink of a second downleg and I believe it will start in Q3/Q4 of this year. Our credit lines are spent, there really isn't any greater fool to service the housing ponzi and we are 1.6 trilion in the s**t in the private sector. Yes real values have already collapsed by 29% according to Halifax index after allowing for inflation since August 2007, but at 4.5 earnings to price ratio you have to believe that a further correction is needed to get to fair value.

While the economy struggles with the ongoing correction then certainly you can't see rates rising.

Edited by crashmonitor

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Kick-start UK manufacturing

Bristol and Glasgow have been added to a list of 'super cities' which are set to drive industry growth, specifically manufacturing, in Britain. The two cities join Newcastle, London, Leeds, Brighton and Liverpool as key business locations identified by HSBC Commercial Banking.

The Future of Business 2011 report from HSBC has revealed that UK manufacturing is making a comeback with a clear focus on advanced technology. According to business leaders, digital communications (68 percent), biotechnology (65 percent) and low-carbon industries (60 percent) will provide the best prospects for growth over the next decade.

Possible good news?

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Yes real values have already collapsed by 29% according to Halifax index after allowing for inflation since August 2007,

Which is why the regime is happy to see a few more years of "modest" inflation.

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While there are currently 50+ applications for most jobs, and any shortfall can be met by advertising the job in EU countries, then I can't see wage inflation taking off soon.

Incidentally wage inflation probably would provoke a rise in interest rates (not the only thing that would). So it's not certain that we can survive 3 years without having to raise rates.

It was sarcasm. Without wage inflation in the present situation, discretionary spending will fall, housing affordability will get worse, ability to service debt will fall.

Also with the above scenario any future rise will be more painful, leading to even more of the above.

I agree, maybe there is no way out, kick the can down the road and pray. But the piper will be paid make no mistake. And this is what Merv is getting knighted for?

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Let's face it: the UK economy has run out of steam. In the "nice decade", the economy was fuelled almost entirely by debt. The massive reduction in debt availability has been offset by increased government spending. We are on a cliff edge ... all we need now is an "event", and the whole thing will fall.

I notice that Brazil's economy is doing well ... I HOPE they haven't binged on debt ....

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The Daily Express continues its transparent cheerleading over house prices:

E6Xnp4Hp.jpg

Only a fool would believe the Daily Express UCtFQsoK.gif

There was free deodorant for every reader? Are they saying their readers stink?

Still can't get over how the VIs brainwashed the UK into thinking rising home prices were a good thing. This is regrettably a triumph of credit-consumerism over common sense. How many normal societies would cheer that they will have to pay even more for the next property they wish to buy if trading up, cheer that they will have to borrow even more, cheer that they will need to spend less or else they will leave less to their children who would then need even more borrowing to buy a home. This is a hoodwinking of monstrous proportons - all in the name of encouraging people to buy stuff from shops using their home as an ATM. An amazing trick, pulled off on most of the public

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There was free deodorant for every reader? Are they saying their readers stink?

I did read it once, and felt very "dirty"! ;):huh:

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I did read it once, and felt very "dirty"! ;):huh:

They also seem to give free milk and free chocolate from time to time, it's almost as if the newspaper itself has no obvious value on its own, unless something's given away with it. Funny that.

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If interest rates stay low we can expect to see

[*]a continuing drop in the purchasing power of the pound

Whilst I agree with your conclusion I don't agree with your contention that that GBP will continue to lose purchasing power because of low interest rates.

It may well do if there is an increase in the money supply, that's inflation; but I don't think it will fall because of a low interest rate. Investors will obviously seek the highest return on their capital but if higher interest rates are available elsewhere they may carry a higher risk. Interest rates in India for example are much higher than the UK, but their inflation rate is also greater and negates the return.

For all the problems in the UK we are politically stable and a low investment risk.

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http://www.mortgagerates123.co.uk/mortgage_news_blog/2011/03/09/uk-has-more-variable-rate-mortgages-than-fixed-mortgages/

According to a new report carried out by Legal & General Investment Management firm around 90% of all mortgages in the UK are set on a variable rate which is a much higher rate than most analysts have predicted.

:o:o:o

My data comes from a considerably smaller sample than that. That is very supprising (so supprising I question it), is everyone mental? Why would you be on a tracker now instead of a as long as possible fixed rate?

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  • 284 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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