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Interest Rate Rises Now On The Horizon In Uk And Eurozone

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Opps

But I think people deep down already know this. They are simply in denial that rates could ever posibly rise.

I have noticed a change in people over the last few months. Six months ago if I said I thought the economy might be close to a downturn people went off on one at me. Now if I say I think the economy is looking shaky they go as white as a sheet and quickly change the subject.

Edited by Spring Bounce?????

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Yes, the cycle of low interest rates is coming to an end primarily because inflation is starting to loom. Inflation is the economic situation that governments are most afraid of because it is very hard to tackle and it can get out of hand very quickly. More to the point, there is only one way that government can try and control inflation and that is by putting up interest rates.

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"Returning to - and then maintaining - trend rates of GDP growth will be tough, given household incomes remain under pressure. The risks to base rates is being skewed to the downside."

Duh, that's exactly what Mr King said they could not do (keeping growth trend constant).

Pent

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Interesting thing is that House Prices have adjusted to low Interest Rate and then some. People have bought their houses at the maximum price they can afford at current IR. I reckon 1% - 2% rises could cripple the majority of recent FTB's - Ludicrous!

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Interesting thing is that House Prices have adjusted to low Interest Rate and then some. People have bought their houses at the maximum price they can afford at current IR. I reckon 1% - 2% rises could cripple the majority of recent FTB's - Ludicrous!

WHEN (not if) IRs rise house prices will have to readjust - simple, not Rocket Science.

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Interesting thing is that House Prices have adjusted to low Interest Rate and then some. People have bought their houses at the maximum price they can afford at current IR. I reckon 1% - 2% rises could cripple the majority of recent FTB's - Ludicrous!

Part of the reason I didn't buy over the past few years it that I factored in what a repayment mortgage would be if rates were 6%-7%. This seemed sensible as this is the long term average. The mortgage at these rates was always too high, considerably more than renting.

Unfortunately this kind of calculation has been completely missing from most peoples calculations, they've been loading up on debt at 3.5% - 4.75% without any consideration that this could change. If everyone had been sensible and considered higher rates prices would never have gone so high. Anyone that gets into trouble when rates are higher deserves everything that is coming to them becausee they are partly responsible for the mess.

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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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