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Time to raise the rents.

How About Feb For That Next Rate Cut Then?

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:lol::lol::lol:

Building company in trouble, ergo IR drops. Not sure about your reasoning there TTRTR!

Still, always good to hear about a building company in trouble!

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Not a prediction, a question based on observation :)

http://www.sky.com/skynews/article/0,,30400-13460724,00.html

Not impossible TTRTR but not desirable in my view. Strange decisions can be made at times of stress but the repercussions can be disastrous.

The overall trend in global terms seems to be for IR's to be increasing. If the UK bucked the trend it would be for short-term gain against long-term pain. The credit/debt situation we and other countries find themselves in has to unwind at some point. If you believe that we can maintain this credit/debt situation forever you are probably aware you are fighting the tide of economic history and are part of a small club betting on a risky long-shot.

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Building company in trouble, ergo IR drops.

The company is not in trouble, it is only going make £205m this year, as opposed to £190m last year. Not like for like due to acquisitions, but still far from in trouble!

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Not a prediction, a question based on observation :)

http://www.sky.com/skynews/article/0,,30400-13460724,00.html

I can see where you would think that a rate cut would be essential to PROP up the market again. The problem lies in the amount of DEBT we have in this country - I dont think we can afford to PROMOTE more debt. We need real cash to start paying for stuff.

Read somewhere - possilby the blog - that a large percentage of people this Christmas DO NOT intend on using credit and will pay for stuff based on what they physically have to spend. I think a lot of the population are starting to think this way. For these builders to get back into profits, they need to start LOWERING the prices so the amount of DEBT borrowed is achievable to a lot more people.

Common sense says we need to move back up to the recommended 8% interest rate. I do not want this TBH but its better to have 80K worth of debt at HIGH IR's than £150K at LOW IR's. At least with High IR's inflation will increase affordability.

TB

Edited by teddyboy

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The company is not in trouble, it is only going make £205m this year, as opposed to £190m last year. Not like for like due to acquisitions, but still far from in trouble!

still, it in no way means that IRs will be cut

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Does the likely increasing valuation of the yuan not mean that inflation is likely to increase?

http://news.bbc.co.uk/1/hi/business/4427202.stm

I think we are at or near the end of the 'China' effect on lower and lower prices of goods.

When I worked for EPSON in 1995 an inkjet printer cost £400 and a scanner cost about the same.

In Curry's yesterday saw a combined EPSON inkjet printer/scanner for £79.

That's 10% of the cost of the equivalent in 10 years.

From this example it's possible to see why inflation has been kept so low but is it really likely that that printer/scanner will only cost £8 in 2015?

In fact, is that printer/scanner going to get any cheaper? I think not and with the revaluation of the yuan the period of low inflation could be a thing of the past.

I don't think it particularly matters what IRs do in the short term, the average debt loaded UK citizen is going to have to pray that they don't go up in the medium to long term because their debt is still going to be huge in 5, 10, even 15 years time.

Whether IRs go up in next year, in 2 years time or 5 years time, the outcome will be the same.

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personally i would be watching the following.

UK GDP - below trend but not deteriorating - thats okay

imported goods deflation - mervyn thinks its not as powerful as before - hence inflation could tick upwards.

second round effects of the high oil price

wage inflation - if this picks up. BoE will not cut for ages.

G.Brown - budget - needs more tax - implications for economy. King will wait to see what GB does only makes sense.

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still, it in no way means that IRs will be cut

I know, that was what I was trying to get across. The economy is not in danger, just profits are lower after a few years of rising profits.

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Not sure if that will lead to the cut.

However I wouldn't be surprised to see an IR cut early next year as a last attempt to prop up a failing economy.

Not sure that would prop up the econcomy. There seems to be a notion around that as soon as the economy starts failing IRs will be cut and TTRTR will be able to make money out of property magically. Cutting rates might just devalue the pound, make all those lovely cheap imports expensive, and put the boot into the consumer even harder. It could be a lose-lose situation. It's not as simple as "I've spotted something bad about the economy therefore IRs are going to have to go down and houses will start going up again".

Not a prediction, a question based on observation :)

http://www.sky.com/skynews/article/0,,30400-13460724,00.html

So let's see if I understand your general theory: If the economy is doing well, then there's lots of money about, houses go up, and you make money. If the economy is doing badly, there is not enough money about, so interest rates get cut to stimulate the economy, resulting in house prices going up, and you making money.

Just because the economy is doing badly doesn't necessarily mean that interest rates will be cut. There have been times in the past when rates have been punitively high for borrowers, but they didn't cut interest rates just to be nice to them and let them go out and get all silly about house prices again.

I think you live in a world of economic fantasy.

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Not a prediction, a question based on observation :)

http://www.sky.com/skynews/article/0,,30400-13460724,00.html

Short sterling is pricing interest rates up. Seriously, if you think that the next move is down then it would make sense to fill your boots with gilts as you're going to make a killing compared to those naive City traders.

If you leverage your investment you'd make far, far more than you do on property.

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Not a prediction, a question based on observation :)

http://www.sky.com/skynews/article/0,,30400-13460724,00.html

I posted a .. well a post yesterday .. from an american economist saying that with increasing IR's in america the dollar was begining to perform better in the currency markets.. becoming stronger against the pound Etc....

Do you know what.. Bring on the low IR's.. see the dollar hit the same level and then witness a run on the pound.

This will happen, this is economic fact.

If america equals our IR's our currency tanks.. and massive inflation follows.

This happened once before.. 1989.. (not dollar led.. but a run on the pound)

Do you know what saved the pound...? do you know what happened next...????

Cast your mind back..

15% IR's can happend to protect the pound again..

Those on us on this site don't have debt based on IR's, we do have savings...

The best thing that would happen to us is a rate cut..

But I don't want that.. I don't want people ruined so I can watch prices fall and my savings swell.

IR's are not there solely to protect fools in too much debt and to persuade others to borrow more..

they are to support the economy and stop inflation..

TTrTR's..

Get a global picture.. and be careful.. you may get what you wish for.

America has confirmed that they will go to at least 5%..

what interest rate would you like...?

4

4.5

5

6

answer..

by this I will guage what you wish to happen....

Economics are complicated.. But when you consider the amount of money all this means..

Its worth reading a book.. trust me.

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Surely you mean Feb for that next rate rise TTRTR? I'm just glad this is hitting the press - less of that 'this is a perfect time to buy as interest rates are heading down' nonsense from the VIs I hope!

Edited by gruffydd

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Not a prediction, a question based on observation :)

Builder In Profits Alert

You haven't been listening have you Teeters me 'ol mukka:

The text of Mervyn's speech is here:

http://www.bankofengland.co.uk/publication...5/speech256.pdf

I particularly like this bit:

"There has grown up in recent years a false sense of our ability to maintain a smooth and steady growth rate of output. So it is important to understand what monetary policy can do and what it cannot ... For the UK economy, monetary policy cannot ensure that output will grow at a constant rate. But in the medium term it can deliver low and stable inflation."

Twice in one paragraph: don't expect monetary policy to keep the economy growing nicely.

A clear disclaimer that the state of the economy is only the Bank's problem in so far as it affects inflation.

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Today's issue of The Times has a story about how "financial markets expect the next move in interest rates to be upwards".

It quotes the consensus of City economists as downwards (as Economic Sensation enthused about recently) but says the futures market, far from seeing rate cuts, has now priced in a 0.25% rise for next year.

Could it be that August's 5-4 vote in favour of a cut will be seen as a hiccup this time next year?

The MPC might have been doing some impressive micro-managing of interest rates or perhaps it made a mistake.

Of course the future's market could well be wrong and we may see another cut (if the economy deteriorates further), although I'm struggling to see why that is good news for the UK housing market (if my view that house prices are "super-cyclical" is more right than your apparent view that the housing market is acyclical).

Either way, I'd refer you to my suggestion late last year that you give on trying to predict every twist and turn in the interest rate cycle and focus on the bigger issues (the high level of house prices, the high consumer debt levels, likely tax increases/public spending cuts etc).

They'll tell you UK house prices are priced for a perfection that doesn't exist.

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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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