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Times Front Page: Ir Rise Will Keep Cameron In No. 10

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Can't quote more than this. Might have to spend some time reading the front page in the newsagents (if they're open)

A pre-election rise in interest rates — made increasingly likely as the economy recovers faster than expected — could help to keep David Cameron in No 10 for a second term. There are more people who believe that they would be better off than there are who expect to be made poorer by a rise in interest rates, according to a YouGov survey for The Times. The finding indicates that two thirds of people think an increase would either make no difference or improve their personal finances. It is at odds with predictions that the move, under which mortgages would increase, would be a disaster for the Government. However, the poll signals dangers ahead in Britain’s rapidly improving housing market. Almost three quarters of those surveyed believe that house prices will rise in the coming year but opinion is evenly split between those who think that the trend will leave them better or worse off. The poll also indicates that households are still unwilling to loosen their belts…

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Edited by rantnrave

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Alternative take on the same story:

A leading pollster said the finding suggested that a pre-election rate hike could actually improve David Cameron's chances of staying in Downing Street, rather than damaging them, as is widely thought.

Some 31% of those questioned by YouGov for The Times said that a rise in interest rates would leave them personally better-off, against 23% who said they would be better-off with lower rates and 32% who thought it would make little difference either way.

Faster than expected recovery has prompted speculation that the Bank of England's Monetary Policy Committee may increase the base rate from its historic low of 0.5% before the general election in May 2015.

The Bank's Governor Mark Carney has previously said that he does not expect a rise until unemployment drops to 7%, probably in 2016. But with official jobless figures now standing at 7.4%, many observers believe the crucial figure may be hit as early as next year.

3447786819.jpgA rise in interest rates would hit mortgage-holders, making it more difficult for home-owners to pay back loans. But it would be good for savers, particularly pensioners who have suffered from poor rates of return on their nest-eggs over the period since the crash of 2008.

Crucially, over-60s are believed to be the age-group most likely to vote in large numbers in 2015, meaning that a feelgood factor for pensioners could deliver dividends at the polls.

The survey found that more people in every part of the UK felt that they would be better-off with a rate rise, but the effect was most marked in the South of England and least noticeable in the West Midlands and Wales.

Some 45% of those questioned expected interest rates to rise in 2014. A large majority (72%) expect house prices to go up, and 16% said they would be better-off if they do rise, against 13% who said they would be worse-off.

YouGov president Peter Kellner told The Times: "For the moment, when inflation looks set to stay low, a modest rise in interest rates is actually likely to please far more people than it troubles.

"In electoral terms, that effect is likely to be heightened as the very people who plainly benefit most from rising rates - the over-60s - are those most likely to vote.

"If David Cameron and George Osborne can preside over low consumer-price inflation but higher rises in the price of homes and other assets such as shares, then some rise in interest rates is likely to win them more votes than it loses."

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Thing is it is just a poll, and the economy is so zombie like that actually a rise in interest rates would lower David Cameron's chance of winning as the economy would simply crash again. Just think all those help to buy and other mortgages suddenly going bad

What the article really says is some pensioners with savings would like to see higher interest rates, rather like land lords would like to see higher rents and I'd like to see lower income tax - pick your vested interest and pick your policy.

What I think this could mean is more signalling of higher rates before the election without actually doing anything.

Edited by Mikhail Liebenstein

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BTW, this suggests Higher Rates definitely won't happen: My http://uk.finance.yahoo.com/news/high-pound-brings-fears-recovery-073013300.htmllink as it would just push sterling up even more/

Given the US and China are still furiously printing, I can't see us doing anything to give us a $2:£1 exchange rate. Yes we'd get nice low inflation at that point, but destroy an export recovery, so we'd be back to the wrong type of growth.

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Sky News are running this every fifteen minutes or so.

A significant rise in interest rates, sooner rather than later, coupled with cessation of "Help to Buy" and other schemes designed to pump up the existing housing bubble is the only thing that might make me reconsider my decision to vote UKIP at the next election.

Edited by Bruce Banner

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The only rates that will rise under Cameron are the WONGA loan shark rates. The government are complicit in fanning the sub-prime flames. Rate rises are inevitable, but not that Cameron will have chosen to act, it will be a forced hand.

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Yeah well, according to the sun, the CEBR reckon the UK economy will overtake Germany by 2030.

I believe them.

The closest they may get is higher total GDP due to massive immigration. I very much doubt if the UK will ever overtake Germany in terms of GDP per capita.

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As I see it, interest rates could be raised before the election without causing any pain to mortgage holders as the majority will be on two-year fixes and so won't start seeing higher mortgage payments until after the election. Meanwhile, savers will undergo an immediate feel-good factor.

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As I see it, interest rates could be raised before the election without causing any pain to mortgage holders as the majority will be on two-year fixes and so won't start seeing higher mortgage payments until after the election. Meanwhile, savers will undergo an immediate feel-good factor.

O RLY?

Neal Hudson (@resi_analyst) 10/12/2013 09:51

Although slowly decreasing there is still £780bn of variable rate mortgage debt out there -> BoE can't raise rates http://pic.twitter.com/9GIni43EgT

Edited by 7 Year Itch

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Sky News are running this every fifteen minutes or so.

A significant rise in interest rates, sooner rather than later, coupled with cessation of "Help to Buy" and other schemes designed to pump up the existing housing bubble is the only thing that might make me reconsider my decision to vote UKIP at the next election.

I feel like this and have wrote to my local mp and told him so. This would like lower house price and enable to buy house at price i can afford. he really is stuck between the devil and the deep blue sea when it comes to this issue with water lapping at his feet

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If the BoE were to raise interest rates whilst the UK economic position in the world remained the same i feel it would result in higher inflation.

What way that inflation would manifest i don't know but i suspect that raising the base interest rate might be a very good way to increase lending to SME's since you are sending a suppressive message on housing (by the rise itself and the other measures being implemented in the mortgage market) whilst having a lot more money available for lending. The money has to go somewhere.

I don't think that 2015 is a good time to hold an election, i think it's a terrible time for the incumbent.

Regards

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Thing is it is just a poll, and the economy is so zombie like that actually a rise in interest rates would lower David Cameron's chance of winning as the economy would simply crash again. Just think all those help to buy and other mortgages suddenly going bad

What the article really says is some pensioners with savings would like to see higher interest rates, rather like land lords would like to see higher rents and I'd like to see lower income tax - pick your vested interest and pick your policy.

What I think this could mean is more signalling of higher rates before the election without actually doing anything.

Interest rates could double without harming the economy. The economy is clearly recovering. For mortgage holders it is unlikely to make much of a difference.

It might be a bigger challenge to normalise interest rates to 5%+ but there is plenty of room in between.

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I thought the BOE raising interest rates was independent of Cameron?

It is independent...... so Cameron and Osborne just made sure they hired a Die Hard, money printing, zero interest rates forever, former Goldman Sachs, steal from the savers to keep the party going for the 1% type guy.

They had to go abroad to find someone who doesn't care about the future of Britain this time.

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The closest they may get is higher total GDP due to massive immigration. I very much doubt if the UK will ever overtake Germany in terms of GDP per capita.

Ever is a long time.

Especially considering it is only 5 years since our per capita GDP was well ahead of theirs...

Edited by gadget

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Ever is a long time.

Especially considering it is only 5 years since our per capita GDP was well ahead of theirs...

Just like the Irish we all got rich paying ever increasing prices for houses but we are now looking at round two because it worked so well for the uk in round one

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Ever is a long time.

Especially considering it is only 5 years since our per capita GDP was well ahead of theirs...

I grant you ever is a long time, things could change a long way into the future.

However, the German GDP per capita was no doubt skewed significantly by absorbing the former east Germany. There has been no such recent event in the UK.

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Just like the Irish we all got rich paying ever increasing prices for houses but we are now looking at round two because it worked so well for the uk in round one

Just shows how poor an indicator GDP can be. If you drive through Germany it will be obvious that it seems a richer country than the UK. However the figures are much closer, and a big part is likely to be because houses are bought and sold for much more money in the UK, despite most being of poor quality and small in size. Debt = Wealth in modern Britain!

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Just shows how poor an indicator GDP can be. If you drive through Germany it will be obvious that it seems a richer country than the UK. However the figures are much closer, and a big part is likely to be because houses are bought and sold for much more money in the UK, despite most being of poor quality and small in size. Debt = Wealth in modern Britain!

+1

In my opinion GDP has become a reverse indicator in the UK.

The political elite have failed to spot the reality. We used GDP from way back when we produced stuff and sold it abroad. But that economy doesn't exist in the UK any more.

If I go out and buy a TV today, chances are it was made in the Far East. Average punter, using credit to buy it, borrowed ultimately from the Far East too. Yet that sale goes into our GDP, even though it's worsened my position. GDP positive, but UK financial health worse.

Robert Kennedy understood it years ago.

"Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities...

Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile."

Robert F. Kennedy

University of Kansas

March 18, 1968

ROBERT-F.-KENNEDY-REMEMBERED.jpeg

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Just shows how poor an indicator GDP can be. If you drive through Germany it will be obvious that it seems a richer country than the UK. However the figures are much closer, and a big part is likely to be because houses are bought and sold for much more money in the UK, despite most being of poor quality and small in size. Debt = Wealth in modern Britain!

This is soooooo true. I am amazed that more people don't open their eyes a bit and see the obvious when they are abroad in places like Germany.

This country is in generations of denial.

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