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The Lower Pound Is Going To Be The Trigger

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I think this is the one to start the ball rolling faster.

A lower pound means all imports become more expensive, raising infaltion, and the pound is in real trouble against its biggest trading partners.

The only way to stop the value dropping is to raise intrest rates, and becuase evrything from oil.gas.food. clothing ect will all be more expensive this will cause the intrest rates to rise due to inflation.

A lower pound might have been good for the usa with a manufacturing economy but for the uk its a disaster.

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$1.72, hardly anything to get exited about.

Indeed. Why worry about a 10% drop in the real value of your income and savings in the last few months?

(Actually rather more if you measure 'real value' against gold rather than dollars)

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This post is clutching at straws time again.

There is not a problem with the £, thats why the BoE, Gordon Brown, all the journo's and economists don't mention it as a big factor.

The Exchange Rate Index, which is the £ against a basket of currencies related to our trade with those countries is roughly where it has been for the last eight years.

This factor has been a big help in maintaining stability as changes in currencies have tended to balance each other out in the big picture.

This is just another kite flying post, with little substance in reality.

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The Exchange Rate Index, which is the £ against a basket of currencies related to our trade with those countries is roughly where it has been for the last eight years.

That's great, provided you don't want to buy oil or gas or any other dollar-denominated commodity, or trade with America, Canada, China, etc, etc, etc...

Edited by MarkG

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This post is clutching at straws time again.

There is not a problem with the £, thats why the BoE, Gordon Brown, all the journo's and economists don't mention it as a big factor.

The Exchange Rate Index, which is the £ against a basket of currencies related to our trade with those countries is roughly where it has been for the last eight years.

This factor has been a big help in maintaining stability as changes in currencies have tended to balance each other out in the big picture.

This is just another kite flying post, with little substance in reality.

I understand that the £ is still within the usual cyclical range, but wont there be a corresponding rise in inflation related to the fall of the GBP compared to the USD? Bearing in mind the historical average inflation figure is about 6%, doesnt the latest movements push us back toward that historical average? In which case, its a cause for celebration, as thats all thats needed to correct the house price bubble - average inflation and interest rates and an average £/$ price?

Or am I flying kites?

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That's great, provided you don't want to buy oil or gas or any other dollar-denominated commodity, or trade with America, Canada, China, etc, etc, etc...

The ERI includes the dollar, along with all other currencies that we trade with.

Don't forget dollar imports only relate to 17%. Euro imports relate to 56%. The £ - Euro rate is much more significant.

If the dollar rate was such a big issue, don't you think the papers would be full of it ?! and the BoE would be talking about it.

........ oh I forget, their silence is just another conspiracy ......... !!

I understand that the £ is still within the usual cyclical range, but wont there be a corresponding rise in inflation related to the fall of the GBP compared to the USD? Bearing in mind the historical average inflation figure is about 6%, doesnt the latest movements push us back toward that historical average? In which case, its a cause for celebration, as thats all thats needed to correct the house price bubble - average inflation and interest rates and an average £/$ price?

Or am I flying kites?

I think someone has said on here before, that a 10% reduction in the £/$ results in a 0.1% increase in inflation. I might be wrong on these figures but it may be worth checking. It needs massive and sustained changes to truly impact our inflation.

The 10% or so fall I believe will have negligble impact. I wait to be proved wrong by events over the next 6 months or so.

I really want IRs to go up, but hanging your hopes on the £/$ is a false hope I'm afraid.

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The ERI includes the dollar, along with all other currencies that we trade with.

Don't forget dollar imports only relate to 17%. Euro imports relate to 56%. The £ - Euro rate is much more significant.

If the dollar rate was such a big issue, don't you think the papers would be full of it ?! and the BoE would be talking about it.

........ oh I forget, their silence is just another conspiracy ......... !!

Oil is traded in USD, so wont the effects of £ falling against to $, stable against Euro, be to push up prices anyway as Euro economies buy oil in $ as well?

Personally I think the price of housing is a big issue, but I dont see the papers "full of it", and I dont hear the BOE talking about it.

Their silence? Its not another conspiracy, its the same conspiracy.

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Oil is traded in USD, so wont the effects of £ falling against to $, stable against Euro, be to push up prices anyway as Euro economies buy oil in $ as well?

Personally I think the price of housing is a big issue, but I dont see the papers "full of it", and I dont hear the BOE talking about it.

Their silence? Its not another conspiracy, its the same conspiracy.

The Euro economies, like the UK and all over the world are absorbing most if not all of the rise in oil costs etc as they are unable to push up prices to their customers.

The oil price rise is due to the oil producers putting up their prices and not the effect of the dollar, which is minute in comparison to the rise in the oil price irrespective of what currency you buy it in.

Inflation is not about to take off on the current level of oil prices or the dollar.

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The Euro economies, like the UK and all over the world are absorbing most if not all of the rise in oil costs etc as they are unable to push up prices to their customers.

Presumably, they will continue to do this ad infinitum. They are soooo charitable these companies :rolleyes:

Inflation is not about to take off on the current level of oil prices or the dollar.

Well thats that then. Is your real name Ed Balls? :lol:

This article suggests that soon, the oil companies will be paying us to use the oil they are running out of.

This summer, it looks likely we are going to have to set our central heating to max all through the summer in an attempt to reduce the oversupply and do the oil companies a favour.

http://www.thisismoney.co.uk/news/article....21&in_page_id=2

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The Euro economies, like the UK and all over the world are absorbing most if not all of the rise in oil costs etc as they are unable to push up prices to their customers.

Costs cannot be carried forever. There comes a point when the chickens have to come home to roost for the manufacturer and retailer can no longer sustain absorption and pass the costs on.

Secondary effects to inflation is a real problem.

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The oil price rise is due to the oil producers putting up their prices and not the effect of the dollar, which is minute in comparison to the rise in the oil price irrespective of what currency you buy it in.

Inflation is not about to take off on the current level of oil prices or the dollar.

Can you just confirm for me, oil is priced in USD? So a 10% fall in the $/£ price, relates to a 10% price increase for oil supplies sold in £ at the pump? Hardly minute, is it?

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I think this is the one to start the ball rolling faster.

A lower pound means all imports become more expensive, raising infaltion, and the pound is in real trouble against its biggest trading partners.

The only way to stop the value dropping is to raise intrest rates, and becuase evrything from oil.gas.food. clothing ect will all be more expensive this will cause the intrest rates to rise due to inflation.

A lower pound might have been good for the usa with a manufacturing economy but for the uk its a disaster.

Whats this now, trigger 198th, LOL,

100 of those from Dr Bubb alone. I am very Bearish on property, but posters on here trying to find the exact trigger that is going to set off the great chain of events that will cause this crash makes this HPC site look more farcical everytime they get it wrong.

Hurricanes

inflation

Deflation

oil

war

bird flu

to name just a few

Sam

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Whats this now, trigger 198th, LOL,

100 of those from Dr Bubb alone. I am very Bearish on property, but posters on here trying to find the exact trigger that is going to set off the great chain of events that will cause this crash makes this HPC site look more farcical everytime they get it wrong.

Hurricanes

inflation

Deflation

oil

war

bird flu

to name just a few

Sam

The more the BoE and government do to control house prices, the more they screw up the economy elsewhere.

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Whats this now, trigger 198th, LOL,

100 of those from Dr Bubb alone. I am very Bearish on property, but posters on here trying to find the exact trigger that is going to set off the great chain of events that will cause this crash makes this HPC site look more farcical everytime they get it wrong.

Hurricanes

inflation

Deflation

oil

war

bird flu

to name just a few

Sam

I think you're confused mate. Higher inflation wont be a trigger, but it will have an adverse effect on the economic outlook. Now if we had a MPC who were not so under the Chancellors thumb they think they like it, then interest rates would rise almost certainly pushing the cycle onwards and downwards. As it is I think there will be a slight of hand, the usual suspects will stand up and try to tell me inflation is under 2% and that there is no reason to increase rates. The average salary will be under pressure from wage deflation, while GB carries on with his stability lie.

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American small businesses are increasingly passing on higher costs to customers. The same is happening in Europe and soon in the UK too.

Small Business Now Passing on Increased Fuel Costs to Customers

Once this is picked up in the core inflation figures it is too late...just old news. Which is why the Fed has sensibly raised rates to more neutral levels already so that it will not have to shock the markets by raising them again too rapidly. Mr King's comments today indicate that he is of a similar mindset.

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Oil may be dollar-denominated, but we still produce most of what we use, so it's not an import.

But it is priced in dollars when extracted and priced in £ from the pump, the movements of $/£ must impact on the price we the consumer pay. If not, then why the rise in price after the hurricane? Damage to oil refineries in the Gulf coast raised prices of North Sea oil sold in the UK?

Or am I flying kites?

Edited by murpaul

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08.09.1992 2.00050

09.09.1992 1.98640

10.09.1992 1.9680

11.09.1992 1.94050

12.09.1992 1.9210

13.09.1992 1.88050

14.09.1992 1.89050

15.09.1992 1.8980

16.09.1992 1.86230

17.09.1992 1.77350

18.09.1992 1.75250

19.09.1992 1.75250

20.09.1992 1.7350

21.09.1992 1.71350

22.09.1992 1.71250

23.09.1992 1.69520

That is a trigger!

01.11.2005 1.7740

02.11.2005 1.76580

03.11.2005 1.77680

04.11.2005 1.77050

05.11.2005 1.75240

06.11.2005 1.750

07.11.2005 1.74850

08.11.2005 1.74510

09.11.2005 1.74330

10.11.2005 1.74390

11.11.2005 1.7410

12.11.2005 1.74270

13.11.2005 1.74250

14.11.2005 1.74220

15.11.2005 1.73820

16.11.2005 1.73620

17.11.2005 1.71760

18.11.2005 1.71960

19.11.2005 1.71810

20.11.2005 1.71570

21.11.2005 1.71850

22.11.2005 1.71830

23.11.2005 1.72210

24.11.2005 1.72440

This is not.

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08.09.1992 2.00050

09.09.1992 1.98640

10.09.1992 1.9680

11.09.1992 1.94050

12.09.1992 1.9210

13.09.1992 1.88050

14.09.1992 1.89050

15.09.1992 1.8980

16.09.1992 1.86230

17.09.1992 1.77350

18.09.1992 1.75250

19.09.1992 1.75250

20.09.1992 1.7350

21.09.1992 1.71350

22.09.1992 1.71250

23.09.1992 1.69520

That is a trigger!

01.11.2005 1.7740

02.11.2005 1.76580

03.11.2005 1.77680

04.11.2005 1.77050

05.11.2005 1.75240

06.11.2005 1.750

07.11.2005 1.74850

08.11.2005 1.74510

09.11.2005 1.74330

10.11.2005 1.74390

11.11.2005 1.7410

12.11.2005 1.74270

13.11.2005 1.74250

14.11.2005 1.74220

15.11.2005 1.73820

16.11.2005 1.73620

17.11.2005 1.71760

18.11.2005 1.71960

19.11.2005 1.71810

20.11.2005 1.71570

21.11.2005 1.71850

22.11.2005 1.71830

23.11.2005 1.72210

24.11.2005 1.72440

This is not.

Thanks for that. I'm confused. Everything moves in cycles? We have been to one end of the spectrum for the £/$ price. We are now moving in the other direction and the signs would suggest its not a dead cat bounce. This is a real, long term movement. Yes or no?

If yes, then timeframe is irrelevant. The movement maybe slow or fast, but its only in 1 direction. The pressure on inflation will only increase, and interest rates will have to rise at some point. They cant go against the cycle?

Im not an economist, but this seems logical to me. What part of it am I leaving out of the equation?

Also I dont see this trigger thing, house prices are a cycle and the movement can only be down, its happening already.

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08.09.1992 2.00050

09.09.1992 1.98640

10.09.1992 1.9680

11.09.1992 1.94050

12.09.1992 1.9210

13.09.1992 1.88050

14.09.1992 1.89050

15.09.1992 1.8980

16.09.1992 1.86230

17.09.1992 1.77350

18.09.1992 1.75250

19.09.1992 1.75250

20.09.1992 1.7350

21.09.1992 1.71350

22.09.1992 1.71250

23.09.1992 1.69520

That is a trigger!

01.11.2005 1.7740

02.11.2005 1.76580

03.11.2005 1.77680

04.11.2005 1.77050

05.11.2005 1.75240

06.11.2005 1.750

07.11.2005 1.74850

08.11.2005 1.74510

09.11.2005 1.74330

10.11.2005 1.74390

11.11.2005 1.7410

12.11.2005 1.74270

13.11.2005 1.74250

14.11.2005 1.74220

15.11.2005 1.73820

16.11.2005 1.73620

17.11.2005 1.71760

18.11.2005 1.71960

19.11.2005 1.71810

20.11.2005 1.71570

21.11.2005 1.71850

22.11.2005 1.71830

23.11.2005 1.72210

24.11.2005 1.72440

This is not.

Yet........(although I agree its not a trigger in itself B) ) However I do not like static or regressive phraseology. An economy is by nature dynamic, things change, sometimes quickly when problems (national and international) compound at speed. When you realise whats gone suddenly wrong its too late :ph34r:

Edited by pdg

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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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