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Bullish Bear

The Telegraph - Economic Agenda

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The danger now is that a vicious circle develops, whereby slower consumer spending forces retailers and other consumer-related firms to cut jobs, prompting consumer spending to slow even more and yet more jobs to be shed. And at some point, consumers still have to face the prospect of tax rises.

Economic Fundamentals still keeping house prices buoyant - i think NOT!


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Guest Charlie The Tramp
Meanwhile, household debt is rising by more than 10 per cent a year. Moreover, lower interest rates have done nothing to reduce household debt repayments. Compared with the early 1990s, interest payments remain low relative to household disposable income but households' total debt-servicing burden - including repayments - is up at the levels seen in the early 1990s.

Roger old bean, so what you are now saying is that your prediction of 3.5% IRs in 2006 to help the ailing economy is a waste of time, and economic forces must now take their course.

A round of applause for Roger please.


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Good article from Mr Bootle. What he mentions about savings ratios bears links to what is being said about the dreaded SIPPS on other threads.

As someone else has mentioned on a SIPPS thread, unless money is already in a SIPPS then there won't be a massive SIPPS related property boom come April.

But if people do start throwing very large amounts of money into SIPPS in a hurry and if this results in an increase in the UK's savings rate, then whilst you may see a few people investing in property via SIPPs who would not have done so otherwise, you'll also see a wider negative economic impact through the increase in the savings rate and the reduced sum of pounds being spent in the shops and pubs.

The recent evidence of a growth in the savings rate is typically cyclical and typically something commentators appear to forget about until it is upon us. Increasing savings has the potential to initiate the viscious cycle that will be the opposite of the 'virtuous' MEW cycle. - We may see a UK where people are spending only 90% of their income instead of 110%. That's a 20% cut in spending and will knock on to jobs. And so increase the savings ratio as people get nervous about their futures. And so knock on to jobs.....

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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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